How does short term medical insurance work?

KM | May 28, 2008

Q: I need health insurance as I am in between jobs and need something on a temporary basis; however, I need to know how this plan actually works: 1 - Are there co-pays? Doctor visits? 2 - Does this plan cover medical supplies? (such as ostomy supplies) 3 - What is the difference between an indemnity and major medical? 4 - If x-rays or blood works are needed, is this covered? Co-pay? 5 - What about ct-scans, etc?

A: Short term medical insurance has a single deductible and does not use co-pays that are common in other types of health plans. All ordinary and necessary medical expenses are lumped together (regardless of whether the expenses are for doctors visits, lab tests, supplies, hospital expenses, scans, etc.), then you pay all up to the policy deductible, the policy pays those over the deductible.

This type of coverage is meant to be inexpensive and simple to use while still providing strong protection from unexpected catastrophic medical costs. The other key benefit of short term medical insurance is that it provides a Certificate of Creditable Coverage so that you get immediate coverage for pre-existing medical conditions under your new employer's group health insurance plan. and Keep in mind that individual medical insurance is meant to cover unknown expenses. It is not intended to take over the cost of ongoing medical treatments or cover pre-existing medical conditions. In your situation, it is likely to be less expensive to take insurance with a high deductible intended only to cover unexpected expenses.

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