Your premium is what you pay, usually monthly, to have your Short Term health insurance for a specific period of time.
You may know it as Obamacare, but whatever you call it, it’s the law that changed the health insurance landscape to what it is today. If you are shopping for Short Term insurance, also often called Temporary health insurance or Term health insurance, the important things you need to know about the ACA are:
Simply put, the amount of money you pay toward your Temporary insurance plan’s covered expenses before the insurance company starts paying anything is called a deductible.
Some carriers offering Temporary health insurance plans give you the option to specify whether the deductible you pay applies:
Short Term insurance plans are not guaranteed issue. Health insurance plans that are guaranteed issue do not turn customers down for coverage based on their pre-existing conditions, any health issues, illnesses, and conditions they currently have or have been diagnosed with. Short Term medical insurance plans are medically underwritten, and to get on a plan, you must first apply, answer a series of medical questions, and receive approval.
Your term is the length of time you select your Short Term insurance coverage to last. The length of term you can choose varies by insurance carrier and state. For most plans you can choose a minimum of 30 days, or 1 month. Some states and plans allow up to just under 12 months of coverage. Either way, Short Term plans can typically offer flexibility for the amount of time you may need coverage. Check plans in your state for more details.
Say you’ve met your Temporary health insurance plan deductible. Your coinsurance is a percentage you pay of your covered medical expenses after you’ve met your deductible. So if you’ve met your deductible and you have a bill totaling $100 and a coinsurance of 20%, then you pay $20 of that $100 covered expense while the insurance company pays the other $80. You pay your coinsurance until you hit your out-of-pocket maximum.
Certain Short Term health insurance plans offer copay options, for example, a $40 copay for a doctor visit or a $25 copay for generic prescription drugs. Basically, a copay is fixed amount you pay for a certain service. Copays usually do not count toward your deductible. Check your plan for specific information.
Your Short Term medical insurance plan’s out-of-pocket maximum is the most you will pay toward covered expenses during the course of your plan’s term. Once you hit your out-of-pocket maximum, your insurance company pays for 100% of your covered expenses. Note: If the plan you picked includes copays, you may still be responsible for those copays beyond your out-of-pocket maximum.
Your covered expenses are those health care services or items covered by your plan. No health insurance plan covers everything, and this is especially true of Short Term health insurance, which is not required to cover the same health benefits the ACA requires. Be sure to check your policy carefully to make sure you are aware of any exclusions or limitations regarding coverage of preexisting conditions or health benefits. Your policy might also have lifetime and/or annual dollar limits on health benefits. If this coverage expires or you lose eligibility for this coverage, you might have to wait until an open enrollment period to get other health insurance coverage.
The carrier of the Short Term medical insurance plan you choose will likely have a list of doctors and other health care providers to use when you have health care needs. This list can be called a network or PPO. Using doctors or facilities from that list means you are choosing “in-network” care. Going to a doctor or facility that isn’t on that list means you are going “out of network” for your care.
Check your Short Term health insurance plan for details regarding any restrictions on going to doctors or facilities outside the network. But even if there aren’t any restrictions, it usually makes more sense to stay in-network when you can. In-network doctors and providers have agreed to provide care at a discounted rate for holders of that health care plan, so staying in network can save you money.
1 There are exemptions to ACA tax penalties available in some instances. Consult a tax advisor for more information.