In a previous article I addressed the difference between real insurance and the appearance of insurance and I think that may be applicable to this subject.
First, Short Term Medical Insurance is a product designed to provide short-term or temporary medical coverage during a short-term loss of major medical coverage. You can typically purchase this for one to six months and depending on the company you can renew it to extend the period of coverage.
In the past short term medical plans filled in for people between jobs when they had lost their employer coverage but would regain coverage with their new job. In the era of ACA this may not be as necessary as it has been in the past as people can now obtain coverage on a guaranteed issue basis with no pre-existing limitations.
Although I believe this is a very valuable type of insurance and that there’s a place for it, I bring it up in the context of the “appearance of insurance” due to a recent conversation with an insurance company.
In speaking to a company representative he told me he had convinced a person to drop their COBRA coverage and replace it with short-term medical because it was so much cheaper. Oh really!
This would be a classic case of the appearance of insurance over real insurance. While the COBRA coverage may have been very expensive it did have unlimited coverage and could be retained for 18 to 36 months. In addition instead of taking the COBRA coverage the individual could have obtained a full major medical policy. The temporary plan would cover for the period of time that he purchased it (1 to 12 months), and should he elect to renew it in most cases it would not have covered pre-existing conditions.
If this highlights nothing else it does point to the necessity of getting qualified information and in most cases I would tell you that comes from licensed and highly experienced agents.
For more information, contact Bill Weaver, Focus Benefits Group, 602-381-9900!