If you are between jobs and thinking about skipping health insurance just to save money, think again. With the high cost of medical care these days, one accident or catastrophic medical event can drive you deep into debt if you don’t have coverage. Thus, you should consider what you’ll be spending on health insurance premiums as a way to buy yourself peace of mind and provide yourself with a safety net – even if you never actually use the policy. For the unemployed, the best way to get coverage is to buy temporary health insurance. This type of policy provides you with health coverage for between one to twelve months, and has affordable premiums. You can also consult any doctor or health professional you want, although if you’re going to be hospitalized for anything other than an emergency condition, you should consult with the insurer first to ensure that your hospital bills will be reimbursed.
There are, however, many drawbacks to temporary policies. The main one is that pre existing conditions are not covered. A pre existing condition is a medical problem that you were diagnosed with a certain period before you applied for the policy; just how long before depends on your state’s laws and the insurer’s guidelines. Another drawback is that many insurers do not cover the cost of preventive health care, such as routine doctor’s visits, which you will have to pay for out of pocket. What this form of temporary insurance does cover is emergency care, surgery and hospitalization costs. In other words, you are basically covered only for major medical problems. Also, if you are considering guaranteed health insurance (plans in which you cannot be refused coverage based on your health status) you should not take out a short term health policy, as this will make you ineligible for guaranteed issue plans.
So what are the factors you should consider when choosing a health plan? There are two, both related to costs – the deductible and the out of pocket maximum. The deductible is the share of medical costs you will shoulder out of pocket before the insurer begins paying under the terms of the policy. The higher the deductible, the lower the amount of monthly premiums you will have to pay. Limited term health plans typically have high deductibles, so you will have to pick a policy with a deductible you can afford. The out of pocket maximum is the total amount of health care the insurer requires you to pay; beyond this amount, the company will cover all of the medical costs that they deem to be medically necessary. When selecting a policy, make sure that the out of pocket maximum is at a level that is still affordable for you.
While doing all of this homework may seem daunting to you, not doing it is worse. One unplanned hospital visit can wipe you out financially. So it makes more sense to be covered in case of unforeseen accidents or other catastrophic events. With all its limitations, temporary health insurance is still the most affordable way for you to get coverage and protect yourself from crippling medical bills.
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