Short-Term Plans Fill Coverage Gaps

Published May 1, 2006

An Indiana-based insurer introduced a new short-term medical plan in March to provide immediate coverage to families and individuals who temporarily find themselves without health insurance.

In advance of college graduation season, when adult children will fall off their parents’ policies and be potentially uninsured while they look for jobs, Golden Rule Insurance Company, a UnitedHealthcare company, launched its newest-generation Short Term Medical plan. The plan fills in gaps in coverage for individuals and families in times of transition and change–people between jobs, students not covered by their parents’ plans, recent graduates, and early retirees.

Under Golden Rule’s Short Term Medical plan, consumers can opt for one to six months of coverage and choose from a range of deductibles and payment options. Customers have the flexibility to drop the plans at any time without penalty, or to apply for an additional one to six months of coverage.

Golden Rule’s plan is unusual because most major insurers don’t offer short-term plans in all their markets, and those that do so don’t give the consumers a lot of choice.

Security Gives Peace

Sandra D’Annunzio, a nurse in Sterling Heights, Michigan, turned to Golden Rule’s short-term health insurance for her two young adult daughters who were no longer eligible for coverage under her plan.

“It’s all about peace of mind,” D’Annunzio said in a news release announcing the short-term option. “Injury and illness can happen to anyone at any age. No one is immune.”

The plan is designed to fit a wide variety of needs. “Whether you’re a recent graduate or a student no longer eligible for a parent’s plan, or in between jobs or waiting for Medicare eligibility, no one can truly afford to be without health insurance,” said Golden Rule Public Relations Manager Ellen Laden in an interview for this article. “Golden Rule’s new Short Term Medical is an affordable, easy-to-understand plan that bridges the gaps in coverage for individuals and their families.

“The application process is simple and quick, and consumers have a choice of deductibles, payment options, and months of coverage,” Laden continued. “Peace of mind comes from knowing that you and your family are protected with quality health insurance, regardless of a temporary situation or life transition.”

Transitions Require Coverage

Those who enroll in a Golden Rule short-term plan gain access to UnitedHealthcare’s national network of physicians and health care providers, as well as substantial discounts on medical services.

“Anyone can break a leg or have a medical emergency and suddenly be facing $10,000 in bills,” said Bob Brow of HealthQuotes USA in the news release. Brow, an independent insurance broker who recommended Short Term Medical to D’Annunzio, explained, “This can be financially devastating to someone just out of school or in between jobs, especially when you realize that affordable temporary health insurance was available.”

Brow, who’s based in Zionsville, Indiana and is licensed to sell insurance in 20 states, said 20 percent of his customers have purchased temporary health insurance. He recommends short-term plans to recent graduates looking for work, students dropping off of their parents’ plans, workers between jobs who find Consolidated Omnibus Budget Reconciliation Act (COBRA) coverage too costly, early retirees waiting for Medicare eligibility, and others whose lives are in times of transition.

COBRA More Costly

Congress passed the COBRA health benefit provisions in 1986. The law amended the Employee Retirement Income Security Act, the Internal Revenue Code, and the Public Health Service Act to provide continuation of group health coverage that otherwise might be terminated.

COBRA provides certain former employees, retirees, spouses, former spouses, and dependent children the right to temporary continuation of health coverage at group rates after the primary earner leaves his or her job. COBRA coverage, however, is available only when coverage is lost due to certain specific events.

In addition, group health coverage for COBRA participants is usually more expensive than coverage for active employees since the employer usually pays part of the premium for active employees, while COBRA participants generally pay the entire premium themselves. Nonetheless, it is ordinarily less expensive than individual health coverage.

“With increased numbers of workers between jobs and more downsizing,” said Laden, “people are looking for an [alternative] to COBRA.”

Unaware of Options

Golden Rule, which currently sells insurance in 28 states, also offers health savings account (HSA) plans, other high-deductible plans, and traditional co-pay plans in addition to Short Term Medical. “Saver” options within many of the plans feature the firm’s lowest premiums, designed for consumers who think they can’t afford health insurance.

Today, 40 percent of health plans purchased from Golden Rule throughout the country are HSAs, and its customers have accumulated more than $155 million in their tax-advantaged savings accounts.

“Bridge policies [such as the Short Term Medical plan] have been around a long time, but the public generally is unaware of them,” said Merrill Matthews, director of the Alexandria, Virginia-based Council for Affordable Health Insurance. “My family had one for about six weeks while I moved from [an] old policy to the individual market. They are great, and I have often recommended them to people in job transition looking for basic affordable coverage quickly.”

Susan Konig ([email protected]) is assignment editor of Health Care News.

For more information …

A brochure describing Golden Rule Insurance Company’s Short Term Medical offerings is available online at