Health Insurance Navigator

By Lisa Zamosky

From time to time I answer readers’ questions. I recently received this question about short-term health insurance:

I have had independent Assurant Health Insurance in a series of 6-month temp policies renewed for several years. Last February I had a pain in my arm and went to a neurologist. They did tests and everything was negative and I never went back; that was the end of it. When it came time to renew the policy later in August, they denied the application based on the February visit even though there was no diagnosis and no pre-existing condition. Can they do that? Is there anything I can do?

Short-term Solution

Unfortunately, the insurance company does have the right to deny you. And it doesn’t take a diagnosis to be declined, as you’ve learned. Just having symptoms show up in your medical record can be enough for the insurer to turn you down.

With short-term insurance policies, each time you want to renew a plan, you’re required to go through the process of medical underwriting: during which insurers review your age, gender,sex, and health history to determine how much it will cost to insure you. If you develop a medical condition you can be declined.

Short-term health insurance is exactly what the name suggests: a health plan that lasts for a brief period, usually six months. These plans are ideal for someone who will have access to another insurance policy within a few months, say through a new job. But many people, like this reader, use short-term health insurance as a long-term solution, re-applying each time the term comes up. That’s often a mistake.

Major Medical Insurance

This reader, as well as anyone who needs health insurance for the long haul, would be much better off with a standard major medical health insurance policy. Major medical health plans remain in effect until you cancel them, plus there are a host of benefits available to you that don’t come with short-term policies. Prescription drug coverage and preventive health care, such as screenings and annual check-ups with no co-pay or deductible, are two examples.

This chart offers a good comparison of the differences between short-term coverage and major medical:

Get Help Finding the Right Plan

Your best bet is to work with an experienced insurance agent. There is no cost associated with doing so, but there’s a huge upside. The right agent will know the insurers in your area and what you’d likely qualify for, and can help you find the right mix of benefits at a price you can afford.

A good resource for finding an agent is the National Association of Health Underwriters.

You can also log onto eHealthInsurance.com and plug in your information to compare health plans side-by-side. Alternatively, you can call the site’s 800 number (1-800-977-8860) to speak directly with a licensed insurance agent who will walk you through this process.

Your turn: Have you used a short-term health insurance policy? What problems have you faced with insurance policies that aren’t what you initially expected? Share your experience in the comments section below.