Many states allow health insurance companies to offer the public temporary health coverage to meet short-term needs (such as covering a person who’s between jobs or a college student who isn’t covered by student health insurance during the summer). Coverage is usually available in increments of 30, 60, 90, 120, and sometimes 180 days, and it’s usually quite good — typically, temporary policies have a coverage limit of $1 million or more, and they usually include freedom of choice and a maximum amount on out-of-pocket expenses.

The biggest advantage to a temporary policy is that you can qualify with almost no medical questions asked. Coverage can be immediate, if needed. But temporary coverage has several disadvantages:
✓ Preexisting conditions aren’t covered. If you’ve ever been treated for
a condition in the past, you won’t be covered if the condition flares up again.
✓ The insurance is usually not renewable.
✓ When the coverage period you’ve chosen ends, so does the coverage often, even if you’re lying seriously ill in the hospital.
✓ Claim payments are often delayed.
✓ Coverage outside the country is often excluded.
Because of these major limitations, you generally want to avoid buying temporary insurance unless you have no other option. If you’re between jobs, continue your group coverage from your prior employer under COBRA if you can. And for summer coverage for college students, keep them continuously insured all year round under your family plan.

In one situation, temporary coverage makes sense — when you’re applying for individual coverage and you currently have no insurance. You complete an application and pay a premium to apply for individual coverage. If the insurance company approves you, it’ll generally issue your policy retroactively, if you desire, effective on the date you applied. If, while your application was pending, you were hospitalized or incurred other medical bills, those bills would be covered. But what if the company declines your application? You would be uninsured for any bills that you’d accumulated since you applied, even if the medical conditions were new.

Even after you apply for individual coverage and pay the initial premium, you’re not necessarily covered. Only if the company later approves you a process that normally takes 30 to 60 days — will you have been covered since the date of your application. That’s a long time to risk being uninsured.
Here’s how you can use short-term coverage to protect yourself when you have no insurance and while your application for long-term coverage is being considered:

1. Buy a 60-day short-term policy to be assured of insurance coverage for any new medical condition or injury that occurs while your long-term application is being considered.
2. Apply simultaneously for long-term coverage, requesting an effective date, if approved, for 60 days from now to coincide perfectly with the expiration of your short-term policy.
Then, if your long-term policy application is rejected, you at least had coverage for new conditions while your application was being reviewed. Without the short-term coverage, the new medical problems would have been totally uninsured.