When I was 21 years old, I did a really stupid thing. I let my insurance coverage lapse after I graduated from college. Until then, I’d been covered by my parents’ Blue Cross and Blue Shield of Illinois plan. It never occurred to me to talk to our Blue Cross agent and explore other options. I just assumed insurance would be too expensive. Anyway, I planned to find a job, and when I did, I would sign up for their group insurance plan.
There was only one small thing wrong with my carefully laid plans. I hadn’t counted on needing an emergency appendectomy before I found my first job. Suddenly, I was over my head with emergency room bills, doctor’s bills, and hospital bills. It took me years to get all of them paid off, and during that time my credit score took a pretty bad hit. All this happened to me because I didn’t bother to research my options.
If I had asked a few questions, I would have discovered that I was eligible for a temporary health insurance, also known as short-term health insurance.
What is Temporary Health Insurance?
Temporary health insurance is intended to get people through a period when there is a gap in their health insurance coverage. It is perfect for college graduates whose insurance lapses while they are looking for their first jobs. It is also great for people who are between jobs, or people who have retired and are awaiting Medicare eligibility.
Short-term health insurance lasts anywhere from one to six months. The policy is non-renewable.
How Can I Make Temporary Health Insurance More Affordable?
Because temporary health insurance is so different from permanent insurance plans, you can manipulate the cost of them significantly. One way you can do this is by purchasing insurance for only as long as you need it. For instance, if you know you will become eligible for Medicare in three months then you might be able to save your money by purchasing a short-term policy for that term. Similarly, if insurance from your new job has a waiting period of three months before benefits start then short term insurance would be a great option to cover you until the group insurance starts.
A word of warning: The policy is not renewable. If you don’t know how long you’re going to be out of work, it’s better to pay for the maximum length of the policy, six months, so as not to risk your physical and financial health.
Another way you can control the cost of your policy is to select a policy with a high deductible. The highest deductible offered by most companies is $5000. That means you will need to spend $5000 out-of-pocket before the insurance starts.
Before you rush out to purchase a plan with a low premium and a $5000 deductible, take a realistic look at your financial situation. If you had to come up with $5000 to meet a medical expense, would you be able to do so? If not, it’s smarter to pay a lower deductible and a higher premium.
If you’re worried about the cost of gap coverage, there are some choices you can make to get your insurance premiums down to a price that you can afford. Before making any final decisions, have a talk with one of Senior Service of Illinois’ licensed insurance specialists to assist in figuring out how much coverage you need and how much you can afford.
Senior Services of Illinois, Inc, (SSI) is an independent, authorized senior general agent for Blue Cross and Blue Shield of Illinois that has been providing health care insurance solutions for over 15 years. SSI’s licensed insurance specialists are knowledgeable and trained in all aspects of health insurance, which makes them a valuable resource in guiding individuals towards a plan that suits their needs.