The Difference Between Short Term Health Insurance And A Regular Medical Insurance

All insurance plans are contracts between the insured and the company offering the plans. And just like any other medical plan, short term health insurance has to be approved by the state government. Most plans are paid monthly and does not have permanent contract and which you can cancel anytime for any reason. So what makes a plan a short term plan rather than a regular plan?

The main difference depends on the liability of the insurance company. The term is based on the amount of months you can get coverage. The insurance policy will finish at the end of a 6 month to 11 month period for short term health plans. You might be eligible to sign up for another plan after the end of the policy. However you might not be eligible to renew the plan if you had a major claim while you have the policy.

On the other hand, regular plans are issued without any expiration date. The insurance company does not have the luxury of cancelling coverage unlike insurers who can drop out anytime. Perhaps the only time this statement is an exception is when the company is dissolved or bankrupt. The basic premise is that the company has to charge more when their liabilities increased. For this reason underwriting for normal plans is so far more involved. Smoking can be a problem particularly for those with plans greater than five years. But for short term plans, it might not be an issue and will not require any medical checkup.

Another difference is that regular insurance requires co-payments for prescription drugs and doctor visits. These types of benefits cost more so that they are not in most temporary health insurance plans. All plans used to be created like short term health insurance plans with a co-insurance and deductible for all medical expenditures. While the deductibles used to be 25 or 50 dollars, the concept is the same for temporary plans with $500 - $5000 deductibles.

There are a whole lot of different options for families and individuals. If you simply require insurance for several months, you can save some money and maintain the coverage you and your family requires short term health insurance.

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