Temporary Medical Insurance Plans

Author: Kelley Filice Jensen

Temporary Medical Insurance might sound like a good idea if you are in between jobs, have a waiting period before benefits eligibility at your new job, were recently laid off….but, what is the difference and savings between an individual medical insurance plan and a temporary medical insurance plan, and are there worthwhile savings on with a temporary plan?

What is temporary medical insurance and how is it different than regular individual insurance?

Temporary medical insurance plans expire after a period of time, and regular individual medical insurance plans do not.

What period of time before temporary medical insurance plans expire?

Temporary plans can remain in place for 1month to 12 months.

Can you renew a temporary medical insurance plan before it expires?

Yes, if you are healthy and still qualify for the plan.

Is there that much of a savings?

Generally, the savings are not great, when looking at comparable plans.  Savings can be approximately 20%.

What is the biggest disadvantage of a temporary plan?

The biggest disadvantage of a temporary medical insurance plan over an individual health insurance plan is that if you become sick or injured while on the temporary plan, and it expires while you are still receiving medical treatment, you will no longer have medical insurance to pay for your medical treatments, and you will not qualify to extend the temporary medical insurance plan nor will you qualify for individual health insurance plans.

What are some situations that a temporary medical insurance plan would be good?

If you have started a new job and there is a waiting period between your hire date and the date you are eligible for Company medical benefits, a temporary insurance plan can be a good idea, assuming that you will stay at your new job past the waiting period.

What are some situations when it would be better to just buy an individual health insurance plan?

In almost every other situation that requires you to buy a health insurance policy it is better to buy an individual health insurance plan:  if you have been laid off,  if you are going through a divorce, if you lose dependent status, if you are an adult child that wants to get off your parents plan, if you are self employed and in virtually all other occasions to shop medical insurance  an individual plan beats a temporary plan.   Individual plans are required by law in the state of California to be month to month, there is never a contract between you and the insurance carrier, so you can always cancel your individual policy without penalty.  The savings on a temporary medical insurance plan is not so great that it justifies the risk taken if you are injured and it expires.

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