Many consumers aren't aware of the benefits of short-term medical (STM) insurance. While they may have heard of STM, they could be under the impression that it's a last-ditch option when securing another form of health insurance has come up empty.
Consumers may also think the costs are prohibitive. In truth, STM is a valuable, easy-to-obtain option when you're in transition, and the premiums are affordable.
Can You Afford the Risk?
Consider this scenario: after 15 years with a company, you're let go in a wave of restructuring. You've never been in this situation before and you know it will likely take at least a few months to line up a role with another employer.
In the meantime, you need to ensure you and your family can maintain health insurance coverage. Your company has suggested COBRA, which would enable you to continue your current health insurance policy for up to 18 months.
But COBRA is expensive. Without your former employer paying its share of the premiums, you'll be responsible for the full cost. If you can't afford COBRA, you'll need to find another option.
You may consider living without insurance for a while, but that's not advisable. Suppose you're on your way to a job interview and get in a car accident, requiring a trip to the hospital. Without insurance, you'll be responsible for the full cost of that visit, which can be several thousand dollars.
Many Americans get in deep financial trouble due to this type of situation. In fact, medical bills are the single biggest cause of U.S. bankruptcies, according to a study reported by CNBC.
A great alternative is STM. Here are some advantages to an STM plan:
- Cost — STM policies are typically affordable. (Your coverage may not be as comprehensive as that available through COBRA.)
- Flexibility — You can customize most STM policies to meet your needs. You can choose the length of coverage and the amount of the deductible.
- Risk Avoidance — As mentioned previously, many bankruptcies are caused by unexpected medical bills that occur when someone is uninsured. A short-term policy helps you mitigate those risks.
- Simplicity — STM policies require no underwriting, so you can usually complete a simple online form and get a response within 24 hours.
An STM policy is an affordable way to ensure coverage while navigating the gaps in your long-term coverage.