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Short Term Medical Insurance Rankings

KM | January 1, 2010

MedSave.com, one of the nation's largest enrollment services for low cost health insurance, conducted a survey of the nation's leading short term medical insurance plans. With the average cost of a traditional individual medical insurance policy now than $550 per month, many people are looking for less expensive insurance alternatives without reducing the level of protection. Short term medical insurance is generally recognized as one of the best values in health insurance because premiums are a fraction of the cost of regular insurance and the coverage is more liberal. The downside of this coverage is that you must re-enroll every 6 to 12 months when the policy expires. Apparently many consumers do not mind the extra effort in return for the financial savings.

Quality of Coverage

Quality of coverage is often evaluated based on the number of complaints received by state insurance regulators, adjusted for the number of policies issued. On this basis, the three highest quality short term medical insurance policies are 1) Standard Security Life, issued by Health Plan Administrators, Inc., 2) Celtic Life and 3) Fairmont Specialty Group, issued under the brand names Simple STM and American Health Shield.

Only one policy had complaint rations significantly above an acceptable level. Time Insurance, marketed by State Farm Insurance and USAA, and commonly known as Assurant Health or John Alden Insurance has surprisingly high levels of consumer complaints, according to the National Association of Insurance Commissioners published reports. Some speculate that the underlying problem is that the agents selling this insurance are typically not benefit plan specialists but also sell homeowners, auto, life, and other types of insurance. Health benefits is such a specialized areas of practice in the insurance field and it is possible that policy buyers are not fully informed of the policy limitations by the Time Insurance agents.

Price

Consumers indicate that price is clearly the single most important factor in the selection of short term medical insurance. The lowest priced insurance plans are consistently favored by buyers as compared with more expensive policies. There are some differences in the level of coverage between the different insurance providers, but most people will not notice them. For most buyers, the key difference in policies is price.

The monthly cost of a $1000 deductible policy varies dramatically depending on age, location, sex and the issuing insurance company. On average, a short term medical insurance policy is priced at 1/3 to 1/2 of the cost of a similar permanent policy.

 

  male age 25 in Atlanta female age 35 in Detroit male age 45 in Philadelphia female age 55 in Miami
American Health Shield (Fairmont Insurance) $80.41 $82.88 $153.63 325.02
Celtic Insurance $49.48 $220.00 $158.01 383.96
HPA Secure Lite (Standard Security Life) $58.05 $98.62 $117.81 188.98

The results of the price survey do not apply to everyone. Insurance policies and prices change frequently so it makes sense to spend a few minutes comparing the different choices to make sure that you get the best deal. MedSave.com lists all of the most popular and reliable short term medical insurance policies side-by-side for fast comparison and enrollment.

Eligibility

Insurance companies vary in the treatment of certain medical conditions, the length of coverage they will allow and the states in which they write coverage. Here are a few examples:

Celtic Insurance is the only short term medical insurance available to applicants who have recently been declined for insurance with another company.

Secure STM is the only policy that comes with a discount drug card that can be used to reduce the out-of-pocket cost of current prescriptions (that would otherwise be excluded as a pre-existing medical condition under insurance).

Simple STM does not ask about an applicant's weight and therefore can be used regardless of build.

MedSave.com covers other eligibility issues and special situations in the many articles posted online.

Conclusions

Short term medical insurance has always been popular with graduating students, those between jobs, and self-employed individuals. Now the coverage is growing in popularity due to the expansion of consumer-driven health plans that allow individuals to choose their own policy and then enjoy the benefits of the savings as compared with traditional employer-provided health insurance. Despite the "short term" name, many people keep this coverage for years. In fact, MedSave.com offers a three year policy that is now available in about 25 states. Almost all buyers voluntarily change health insurance before the three years are up, according to Morrison. MedSave.com has issued more than 5,000 of these policies to individuals in all 50 states and DC as well as replacement life insurance and other benefits.

It is important to remember that commercial individual health insurance policies (whether short term or long term) usually do not pay for the cost of treating pre-existing medical conditions.

For those who are not restricted by the limitations on eligibility or pre-existing medical conditions, short term medical insurance continues to offer the best value in health insurance today. Premiums average less than half of the cost of traditional insurance, yet allows the freedom to seek all medical care with any medical provider in the country, without seeking pre-approval from the insurer, and offers the assurance that all ordinary and necessary medical care will be covered.


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