Category Archive - Short Term

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The Long and Short of it: Short-Term Health Insurance

Monday, October 11th, 2010

What is it?

Although you might think a couple months without health insurance is nothing to worry about, there is always a possibility of an accident or illness that could be financially devastating. Accidents happen, and taking measures against their detrimental effects is critical; this is why health insurance is a necessary safeguard. Short-term health insurance typically has the same benefits as a major medical plan, but is designed to specifically protect you against unforeseen illness or injury. Thus, preventative care is usually not included. (more…)

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How To Prevent Short Term Health Insurance Buyers From Gaming The System

Wednesday, June 30th, 2010

Image: MNgilen under CC 3.0

With reform beginning to take effect, subsidized guaranteed issue insurance for people with pre-existing conditions is set to become available. Unfortunately, there is a serious concern: the issue of people gaming the system.

In some places, such as Massachusetts, people will buy short term health insurance when they are knowingly sick and cancel shortly after they receive treatment (under one year later). Insurers pay for their treatments, while receiving little in premiums for reimbursement. Therefore, the costs are passed onto steadily insured consumers.

The prevalence of this practice has skyrocketed over the past several years. Legislators are proposing several solutions, including an open-enrollment period that would allow individuals to buy temporary coverage solely during one or two months out of the year. There would be exceptions included for major life changes.

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COBRA Subsidy Extension Fails; Get Short Term Health Insurance

Monday, June 14th, 2010

Image: Napalm filled tires under CC 3.0

A divided Congress failed to pass a bill that would have extended the COBRA health insurance subsidy for jobless workers. COBRA allows ex-employees to continue on their old employer’s health coverage, but it forces them to cover the entire premium–which they are often unable to afford. As part of the 2009 stimulus package, President Obama included a subsidy of up to 65% of the cost of COBRA coverage for those laid off during the recession.

Unfortunately, millions are still unemployed. The subsidies are steadily expiring, but budget concerns have made moderate Democrats (with an eye on winning re-election in November) leery of passing yet another big spending bill. President Obama has begged them to renew the subsidy, but to no avail. As a result, many will let their coverage expire and become uninsured.

However, there is a solution. Short term health insurance coverage can be kept only as long as you need it, until you find another job with health benefits. Most options are typically less generous than a previous employer’s insurance may have been, but that means that it will be more affordable. Such coverage protects you against essential emergencies.

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Beware Of Lapses In Health Insurance Coverage

Thursday, April 29th, 2010

Image: Brandon Cox under CC 3.0

Most people realize the importance of having a health insurance plan. Unfortunately, some may not believe that a short lapse in coverage is a big deal. The problem is that being uninsured for as little as 24 hours could end up being a major problem. If you need to visit the hospital during that short period of time, you’ll be responsible for the full bill.

When do these interruptions occur?

  • When you switch jobs
  • When you leave a job for self-employment or starting your own business, and buy your own health insurance plan
  • When you leave your parents’ health insurance
  • When you join your spouse’s health plan

There are other instances. Either way, try to avoid it. A good way to do that is with short term health insurance, which is available for terms as little as 30 days. It’ll help you fill the gap and avoid financial hardship.

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Will People Game The System With Short Term Health Insurance?

Monday, April 5th, 2010

(Image: Darwin Bell under CC 3.0)

Healthcare reform, including the employer and individual health insurance mandate, is very controversial. A recent report from Massachusetts exposes why, as unpleasant as it sounds, a mandate may be necessary. Supporters of the mandate have warned that without it, consumers would forgo coverage when they were healthy and buy health insurance plans only when they got sick–actions that completely upend the insurance industry.

It turns out that last year, several hundred individuals took advantage of reforms in Massachusetts through short term health insurance. From Blue Cross Blue Shield alone, they purchased coverage for periods of three months or less, yet filed extremely costly claims. Although they paid an average of $400 a month in health insurance premiums, their average monthly claims were over $2,000!

This example should inspire the federal government to write regulations combating the practice. Waiting periods for certain costly pre-planned treatments (such as knee surgery or fertility services) may be the solution. The purchase of temporary health insurance could also be limited to twice a year, barring major life changes.

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On Strike? Consider Short Term Health Insurance

Friday, April 2nd, 2010

(Image: Andrew Ciscel under CC 3.0)

Sometimes, union members go on strike to prove their point in contract negotiations. It’s currently illegal for a company to fire an employee who is on strike (although they forgo any income they would have otherwise earned during that period), but there are no laws regarding the removal of benefits–such as health insurance.

Therefore, Shaw’s Supermarkets (a Massachusetts chain) has decided to cut off health care coverage for the striking workers. About 300 strikers and their dependents are affected. If you’re a member of a labor union considering a strike, keep that possibility in mind. Short term health insurance may be a worthy purchase, especially if you are expecting the negotiations to take a long time.

Shaw’s denies that they are using a hardball negotiation tactic. Instead, they point to the soaring cost of health insurance plans. They are also responsible for the health care coverage of nearly 25,000 other employees. Unfortunately, if they’re not currently gaining productivity from the striking members, it is a financial decision.

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Government-Funded Health Insurance? It’s Already Happening

Friday, February 5th, 2010

According to a report from the Center of Medicare Services, over half of healthcare spending is set to come from federal and state governments by 2012. That’s even if health insurance reform is not enacted. They blame the increasing number of baby boomers aging and therefore becoming eligible for Medicare insurance, as well as the recession. The latter is at fault for leaving millions out of work and without employer-sponsored health insurance (meanwhile unable to afford short term health insurance), causing them to then apply for Medicaid.

The reality could be even worse! The report assumes that a long-planned cut in Medicare’s reimbursements to doctors would take effect next year. Instead, physicians cried foul and the 20% reduction was shelved. Such a reduction would force private health insurance companies to pick up the slack. The premiums of temporary health insurance and other types of insurance would increase as a result.

Many are understandably concerned about the Obama administration’s healthcare reform proposals. Some people believe that there is the potential decreased quality of health care if the government is more deeply involved in providing health insurance. However, this new research ignores the pending legislation altogether. Granted, the Democratic-led reforms could lead to an even larger share of government spending. Either way, taxpayers will be contributing more towards health insurance costs.

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Health Insurance Debate leaves Health Needs in Limbo

Friday, January 29th, 2010


health insurance.

This is the predicament for an alarming number of Americans who are just hoping congress will do something to create more affordable health coverage including short term health insurance, family health insurance, and all other types of plans. President Obama used healthcare reform as a major platform during the presidential election. He promised to stop ignoring the health needs of uninsured Americans and make healthcare affordable for every individual who wants to have it.

However, things seem very uncertain for the healthcare bill backed by Obama. The House, Senate and White House seems to be in a tug a war match over the bill. And nothing is getting getting accomplished. At the State of the Union address Obama made it clear he is not giving up on healthcare reform and made a personal commitment to put his weight behind a comprehensive healthcare bill based on the legislation already approved by the House and Senate. “I took on healthcare because of the stories I’ve heard from Americans,” Obama said. “I will not walk away from these Americans, and neither should the people in this chamber.”

Republican leaders insist however, that the bill has serious constitutional issues. “This will be the first time in history that individual citizens in this country will be forced to buy something they may not want. And they may be forced to buy a federal version of something they don’t want,” Senator Orrin Hatch said.

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Learn Math to Save On Your Health Insurance

Thursday, January 28th, 2010

When it comes to buying health insurance, it is very important to compare health insurance plans. Doing so lets you find the best deal: affordable premiums and deductibles with the coverage you need. It only becomes more complicated when multiple family members need long- or short term health insurance. However, selecting among the various types of health insurance plans available is difficult when your math skills are not up to par.

If you aren’t a math whiz, you’re not alone. Just one in seven Americans were found to be proficient in relevant mathematics skills–a figure that includes college graduates! Calculators and reputable advice are very helpful, but are sometimes not enough. Math allows you to better understand your purchases, as well as make sure that you got the right price. That applies whether it’s a washing machine, a car, or COBRA insurance.

What impact does this have on buying health insurance plans? A sample question asks an employee to figure out the premiums he or she needs to pay under an employer-sponsored health insurance plan, given a table that shows how costs vary based on family size and annual income. Unfortunately, most respondents were unable to solve the problem. Brushing up on basic math (no complicated calculus or trigonometry needed) will help improve your life in many ways; making the purchase of individual health insurance easier is only one of them.

(Image: woodleywonderworks under CC 2.0)

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