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Changes to short term medical insurance

by Tony Novak, CPA, MBA, MT
, revised 5/8/2012

Since the passage of the Affordable Care Act in 2010 short term insurance has become both more important but also more limited. Short term medical insurance remains as the most cost efficient way to preserve continuity of coverage between group insurance plans. It's role after 2014 is uncertain.

Short term medical insurance has become the preferred type of coverage for many people who buy their own coverage. The number of people who enroll for short term medical insurance online has grown sharply year after year and it is not difficult to see the reason for this popularity. This health coverage is less than half of the price of other types of health insurance and offers more liberal benefits - including the ability to be treated by any doctor or hospital in the U.S.

The name might be misleading, because the is no distinction between the length of time this coverage is used as compared with other types of individual health insurance. In 42 of the 47 states where this type of coverage is available, an applicant can reapply for coverage each year for as long as necessary.

The key limitation is that this insurance does not apply to pre-existing medical conditions. It is meant to cover medical problems that might happen in the future, not medical issues that are already a problem. This insurance is not suitable if you have a previous medical problem that could surface again.

This month the nation' s largest issuer of short term medical insurance announced enhancements to its plans to make them even more attractive to applicants. Assurant Health, formerly Fortis Health and Time Insurance issues coverage in 46 states. Not all of the enhancements are immediately available in all states.

Key provisions of the enhanced coverage are:

1. Policies are available in either 6 month or 12 month forms. The shortest coverage is one month. In response to 2011 federal regulations by HHS, some plans are now limited to 11 months.

2. Per person policy deductibles range from $500 to $5000.

3. Prescription drugs are covered subject to policy limitations.

4. Optional coverage includes life insurance, dental/vision discount card and emergency medical expense reimbursement.

5. Enrollment is usually done online, but mail or fax enrollment may be possible. When using online enrollment, policies and ID cards may be downloaded and printed immediately.

6. Coverage can be effective on the day after you enroll.

For details on short term medical insurance coverage, pricing, eligibility, to enrollment download forms or to enroll online, see www.FreedomBenefits.net.

Status: available for reprint

See Freedom Benefits for details on currently available short term medical insurance plans.