What is Short Term Major Medical?

Short term major medical refers to a type of health insurance plan that lasts for a predetermined amount of time, usually six months, and insures the policy owner against catastrophic medical events that might otherwise be financially ruinous. Short term major medical can be purchased from insurance providers, and is often purchased by the temporarily unemployed, or those whose employers do not provide health insurance. Like other health insurance policies, short term major medical plans include deductibles, possible coverage limitations, and other provisions or restrictions.

As the name implies, short term major medical policies are generally designed to cover medical problems arising from unforeseen illnesses and injuries that might result from some type of accident. It is important to review the policy and benefits to find out exactly what is covered. Often dental services, psychological or mental health conditions including substance abuse, and routine services like physical health examinations or screening procedures for employment or travel are not covered. Hence, the emphasis of such policies is on acute or short-term medical issues, rather than chronic or ongoing issues, unless they arise from an injury or sudden illness. Pre-existing conditions are very unlikely to be covered in most short term major medical policies.

Short term major medical plans may have stricter limitations than other policies, like those one might receive from an employer. The owner of a short term major medical policy should consult her policy's manual or guidebook to find approved practitioners and the covered services they offer. Certain types of care providers, like chiropractors or substance abuse facilities, are usually not covered.

The cost of short term major medical can depend on the chosen deductible if options are available. A deductible is the fixed amount one pays for covered care before the insurance company makes benefit payments. Choosing a low deductible requires the insurance company to begin making payments after the policy holder has paid for a certain lower dollar amount of care out of pocket. Because the insurance company is potentially responsible for greater payments, these policies are more expensive. On the other hand, having a high deductible means the policy owner is responsible for more payment up to a higher threshold, so these policies are less expensive.

Choosing a deductible can depend on one's financial situation or the likelihood of needing medical care. Deductibles usually apply to the entire term of the policy, so a continuous total is kept throughout the period until the deductible has been reached. After this, the owner of the policy may still be responsible for a percentage of the cost of care or medical services.