A Few More Thoughts on STM

Short Term Medical plans are wonderful tools, if used correctly and judiciously. For example, if you�re between jobs, and need coverage for a short and definable period of time, they�re an inexpensive alternative to COBRA.
Or, you�ve started that new job, but there�s a 90 day waiting period until your new group coverage starts. Well, and STM plan will nicely fill that gap, offering protection until the group plan kicks in.
Maybe you�ve recently graduated from college or tech school, and need temporary coverage during your job search. Again, if you�re pretty confident that this will be a short time, say 3 or 4 months, then STM may be just what the doctor ordered [ed: couldn�t resist the pun, could you?].
But there are some pretty significant downsides to these plans, as well. Recently, I had occasion to exchange emails with a nice lady in a nearby town. Her daughter is taking some time off from school (college), and is unsure about how to go about getting coverage. Her daughter�s too old to be on her folks� plan, but doesn�t have access to a group plan.
Which seems to mean that a STM plan would be the way to go.
But not so fast!
Since we really don�t know how long she�ll need coverage, we don�t how many months to buy (STM is typically sold in monthly increments). And as I noted above, I am leery of using STM�s for more than a few months at a time.
Why, you ask?
Simple: STM plans do not cover pre-existing conditions, and there is virtually no way to continue benefits once the plan runs out, even in the middle of a claim. Most plans limit �extension of benefits.� That is, once the plan ends, so does your coverage. A typical plan might extend those benefits for a period of time if you�re currently hospitalized. Okay, but what if it�s chemo, or some other condition that requires lengthy outpatient follow-up?
More tomorrow�

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