Short-Term Health Insurance – The Perfect Solution For Freelancers Or Those Moving Though Life Events
Freelancing is a type of work that is growing in popularity in recent years. This type of career is one that allows people to balance work with a healthy lifestyle. In the year 2019, there were 57 million freelancers in America. Of all of these freelancers, almost 30% of them worked full time. There are several advantages to freelance working, but the greatest disadvantage is not having access to an employer-sponsored health plan. In the event that you do freelance work, there are still other health insurance options to select from. Here we detail what you need to know in order to make a good choice.
Short-Term Health Insurance
This type of health insurance is referred to as ‘limited-duration’ insurance. It is a form of coverage that is designed to cover people for a limited period of time. Thus, it is sort of a temporary health insurance policy that covers basic medical expenses, usually medical emergencies and not the day-to-day medical care or preventative care type of cover. Also, short term health care plans are not ACA-compliant.
Why Short-Term Health Insurance May Be Attractive for Freelancers
Freelancers tend to opt for the short term health covers options for a number of reasons. Firstly, it is a good option to select in the event that you earn too much income to qualify for Medicaid coverage, but not enough money to spend on a more expensive health insurance policy. Short term health insurance bridges this gap. It is better to have short term health insurance rather than not having health insurance at all. This is especially true if you don’t have a large emergency fund to dip into in the case of a medical emergency. However, short term health insurance can also be a great choice if you do earn enough to have traditional health insurance, but if you missed the enrolment period. You can generally only purchase out of this open enrolment period in the event that you have a qualifying life event. Sort term health insurances are also attractive as an alternative to ACA insurance policies, which are more expensive.
Short-Term Health Plan Costs
In general, short-term health plans tend to cost about a third to a fifth of the price of ACA plans. The actual cost of a short-term health insurance plan depends on whether you qualify for a subsidy or not. It is estimated by the Kaiser Family Foundation that short-term health insurance cover comes in at around 20% the price of ACA’s Bronze coverage plans. The KFF reports an example of an ACA policy costing between $264 and $469 a month, with a short-term health insurance policy costing around $25 to $141 a month. Of course, the cost of the premiums also depends on age and lifestyle for short-term health insurance plans as it does for any other type of insurance plan. People aged between 18 and 24 paid roughly $63 per month and those aged 45 to 54 paid about $170 per month.
What’s Not Covered in a Short-Term Health Insurance Plan?
While ACA marketplace health insurance plans are required to cover the 10 essential health benefits, this is not a requirement pressed onto short-term health insurance plans. The short-term plans provide very minimal coverage and they are not even available in all states. Where these plans are offered, they don’t provide any coverage for preventative care, mental health and substance abuse, prescription drugs and immunizations, hospitalization or pregnancy or prenatal/maternity care. It also doesn’t cover pre-existing conditions. It is likely that you need to have a medical exam and you may be denied coverage for medical issues they may find.
The Questions to Ask Your Insurer
Short-term health insurance plans can last for up to a year. However, there are options that enable you to extend the plan to longer than that. There are many different insurance providers and each has its own options and benefits. Be sure to ask about the terms and conditions of the plan they offer, the details on what it covers, where you can seek medical services form, and whether there are application fees or waiting periods, penalties, or deductibles/copays.
Medical debt is a serious issue and many people wind up bankrupt as a result of unexpected doctors’ bills. Don’t let this happen to you. If you are a freelancer or if you do not have health insurance for whatever reason, consider the short-term health insurance options to help fill in the gap and avoid debt. Better safe than sorry!
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