Mind the Insurance Gap

Policies are sold with deductibles ranging from $250 to $2,500. The amount of the deductible you're willing to assume, plus the amount of the copayment you agree to, will determine the monthly premium.

The application process for a short-term policy is simple, with simplified medical underwriting. (Note: A pre-existing condition will disqualify you, and if you don't answer the questions honestly, you'll risk not being covered if you submit a claim.) You can pay your first bill by credit card or bank transfer, so the coverage goes into effect immediately.

Costs and Comparisons

Though short-term health policies have been around for a while, the field has become more competitive in recent months, so prices have fallen and benefits are more attractive.

The two leaders in the field are Golden Rule, a division of UnitedHealth(UNH Quote), and Assurant's (AIZ Quote) Assurant Health unit.

Price comparisons are easily made at eHealthInsurance.com, where there's a special section for short-term health insurance policies. You can also go directly to the Web sites of Golden Rule and Assurant Health. In general, the premiums for these plans are quite reasonable.

For example, a 22-year-old male could purchase a policy from Golden Rule with a $2,500 deductible and an 80/20 co-pay for $47.25 a month.

Lowering the deductible to $1,500 raises the premium to $56.70 per month. Golden Rule says the average price across all of its markets with a $500 deductible is $57 per month.

The monthly premium is important, but equally important is the breadth of the provider's network of health care professionals and hospitals. You'll want to use an in-network provider with these policies to take maximum advantage of the discounts provided. Golden Rule claims to have an edge with lower premiums in 75% of the ZIP codes in the country. It also claims that its discounts on cost of service are greater because parent UnitedHealth owns a huge network of providers with tremendous volume.

There's one caveat to keep in mind with short-term health insurance policies. They work fine -- but only up to one year. If during that period you encounter an illness, disease, or accident that will have long-term consequences, you'll be deemed to have a pre-existing condition when you ultimately seek permanent health insurance. Then costs related to that condition may not be covered, or not covered for at least one year.

But if you have a short-term need for health insurance and figure you're likely to have permanent coverage from a job in a few months, then these policies are the perfect solution to a potential gaping hole in your financial security. And that's The Savage Truth.