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Short Term Health Insurance in New York

TN | May 3, 2006

Summary
Why permanent insurance may not work
Mini-med and hospitalization insurance
Transient, international and immigrant coverage
Legal issues
Resident address outside of New York
Beware of Discount Plan Scams

Summary

New York is one of four states whose insurance laws do not recognize the popular and inexpensive type of health insurance that is used to provide temporary coverage in most of the country and outside the U.S.  The options available to New Yorkers are 1) use the regular insurance plans that are more expensive types of coverage and have a more tedious application process, 2) use mini-med and supplemental insurance, 3) use short term insurance coverage legally obtained in other states, 4) immigrant coverage for those recently entering the U.S., or 5) international health insurance for travelers. At this time, the best available compromise for New Yorkers who need fast, inexpensive short term health insurance is the limited benefit Core Health Insurance that provides reasonable protection when full major medical insurance is not available.

Why Permanent Coverage May Not Work

The most obvious solution would be to enroll in the regular permanent renewable health insurance plans available in New York and then cancel the coverage after the short time coverage need is passed. This may not as easy as it sounds. First, most regular health insurance coverage can only be issued on the first of the month following the date your application is processed. Application processing usually takes a few weeks so this means that total waiting period from the date of application to the start date of coverage could be four to eight weeks. This may be useless for people who need only a short period of coverage. Secondly, this type of coverage is expensive. The least expensive renewable major medical insurance in New York state is currently more than $400 per month. Many people who need short term insurance are not fully employed and not able to pay the full price of major medical insurance so the price is simply out of reach of many who need coverage. Fourth, these insurance plans typically do not provide the same level of coverage when travelling outside of the New York area. Finally, these regular health insurance policies tend to be managed care plans rather than traditional indemnity insurance that is preferred by many health care consumers.

Mini-Med and Hospitalization Insurance

Because of the lack of low cost short term medical insurance policies, some New Yorkers use "mini-med" or hospitalization insurance policies to supplement coverage or bridge a gap in regular major medical coverage. While supplemental insurance does not cover all medical risks, it is better than having no coverage at all. Other advantages are that these policies tend to have more liberal eligibility requirements, cost less than major medical insurance and have relatively short waiting periods before pre-existing conditions are covered.

Core Health Insurance is one of the nation's most popular limited benefit insurance plans and one of the only plans of its type available in New York state. This is a universal health insurance policy, meaning that all applicants are approved. Immediate coverage is available to all applicants regardless of medical history. Unlike major medical insurance policies, this coverage defines the specific benefits and dollar amounts of coverage available. Obviously, the higher the benefit, the higher the premium. Still, at its higher benefit levels available this policy is a reasonable substitution for short term medical insurance when other options are not available. An average policy in New York is priced at $120 to $400 per person per month, depending on age.

MedSave.com hospitalization-only policies are currently unavailable in New York state. (This is a recent change).

Mini-med and hospitalization policies do not provide a "Certificate of Creditable Coverage" that may be important for continuation coverage under a future employer-provided group health insurance plan.

Transient, International and Immigrant Coverage

Transient New Yorkers tend to fear that the health insurance policy they used in another state may not be applicable when they return home to New York. That is simply not the case and there is no cause for concern. The problem is limited to the choices of new health insurance once you are already living in New York State. Prior coverage is always recognized in New York. For this reason, whenever possible, it is usually best to solidify health insurance before moving to New York State.

The domestic health insurance policies issued at MedSave.com provide coverage anywhere in the United States. Coverage is available with any doctor or hospital in New York state or anywhere else in the country. It does not matter where you live, work or travel. It does not matter where you may vacation or go to school. It does not matter where your doctors and medical providers are located. Keep in mind that some managed care health insurance policies (policies not issued at MedSave.com)that use provider networks (mostly HMOs and Blue Cross/Blue Shield plans) provide a lower level of benefits for coverage outside of the provider network. This is not a catastrophic problem because insurers and providers usually limit the out-of-pocket penalty to about a thousand dollars.

International health insurance policies come in type types: "travel" and "worldwide". Travel policies are available specifically to provide supplemental coverage outside the home country. These are easy to obtain and relatively inexpensive, but are useful only to those who purchase coverage before coming into New York state. These policies provide very limited benefit while in the "home country" and so these policies are not useful to most New Yorkers who need short term health insurance. Worldwide health insurance policies provide coverage in the home country as well as any other country. Enrollment is available at any time regardless of current residence. These policies are valuable to individuals with homes or business interests in more than one country. Worldwide health insurance policies provide excellent coverage but suffer from the same as permanent coverage. Applications take days or weeks to be approved, the coverage is expensive and not everyone qualifies.

Those who moved to New York from a country of origin outside of the United States within the past two years ago are eligible for a special type of insurance called "Inbound Immigrant". This provides liberal coverage and is available regardless of pre-existing medical conditions.

Legal Issues

Health insurance is controlled by the laws of each state. New York is generally known to have more restrictive insurance laws than other states. The intent of New York's law is to ensure all residents receive the same level of health insurance benefits, it backfires for many New York Residents by making the nations' most popular and affordable health plans unavailable. The three other states that have similar problems with short term health insurance are New Jersey, Vermont, and Washington. This means that while fast low cost short term coverage is not available in these four states, any health insurance policy legally issued in another state will provide protection to transient New York residents who travel into or out of the state.

Legal control of individual health insurance policies is based on the residential address of the policyholder. In contrast, other types of insurance policies may be based on the location the contract. For example, if an insurance application was signed in Connecticut, then it is normally guided by Connecticut laws that may be more favorable to the policy owner than the laws in her own state. Some New Yorkers believe that they should be able to enroll in the most attractive insurance plans that are available to residents of other states.  Attempts to change this law restricting health insurance are now underway at the state and national level but the outcome is uncertain. Until then,  For now, we have to live with existing restrictive laws.

Fortunately, the address of residence laws are not as prohibitive for short-term health insurance. Short-term health insurance is usually issued during periods of transition. This could be a job change, recent graduation, relocation, starting a business, etc. For this reason there is no requirement that the address be a permanent legal address. Many short-term health insurance policyholders do not have a stable residential address. Any current residential address where the policy may be mailed will work. This could be a summer home, a school address, temporary housing, etc.

This flexibility creates a conflict in public policy between our general desires to make affordable heath insurance available to as many people as possible and insurance regulators' efforts to restrict insurance that does not meet a state's political agenda of providing universal or comparable coverage for all insured citizens. We believe that eventually the former will prevail, but it is important to abide by all state insurance laws in the meanwhile.

Resident address outside of New York

Short term medical insurance is meant to be portable and useful to people who are travelling from state to state. Coverage issued in one state is valid in all other states. Individuals with a permanent legal residence in New York state are not restricted from enrolling in a health insurance plan that is available in a state of temporary residence. New York residents frequently obtain short term medical insurance while visiting another state that offers this type of coverage. This insurance may be issued using a temporary address in a state where such coverage is available. Since the insurance provides coverage with any doctor or hospital nationwide, including New York, this same policy provides protection for a New Yorker after returning home. For example, New York students may obtain insurance at their college address, while on vacation, visiting relatives or business associated in another state, or while attending an out-of-state camp, program or medical facility (that typically require evidence of medical insurance. For a listing of states that offer the most popular short term health insurance policies, see the MedSave.com product availability chart

Beware of Discount Plan Scams

The unfortunate promotion of "health plans" that are not insurance plans at all but actually PPO discount plans deserves mention here. These plans are readily available to New York residents and may appear to be almost too good to be true - especially to those who do not read the fine print. Problems occur when aggressive advertising is combined with exaggerated claims of benefits like "Save 60% on your health bills for only 89 per month for the family. Everyone accepted, pre-existing conditions covered". These discount plans actually become a liability for people who misunderstand the benefits they have purchased. A separate article titled "Comparing Health Discount Plans" offers suggestions on evaluating the quality of these alternatives. The New York discount plans for medical, prescription drug and dental expenses offered at www.Ehealthdiscountplan.com are probably the least expensive and involve little risk because the reputable provider offers a money-back 30-day evaluation period.

If you elect a non-insured health discount plan instead of an insurance plan, be realistic about the benefits. They do reduce out-of-pocket costs significantly - maybe 20% or more. But expecting that any of these plans will cover the majority of your health care bills is simply naïve. These discount plans are not a substitute for insurance.


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