Short Term Health Insurance Alternative

From Forbes

Sarah Billik may be an adventurous 22-year-old, but she's not willing to take risks when it comes to her health or her bank account. Last June, she was dropped from her parent's health insurance plan after graduating from Oregon State University. Come August, she'll be covered again when she starts a beer brewing apprenticeship in Germany.

Rather than go uninsured for the month of July, she bought into an increasingly popular plan: short-term health insurance. Through eHealthInsurance.com, Billick paid Health Net (nyse: HNT - news - people ) a $12 application fee and $30 for one month's coverage. Says Billick: "It's $1 a day. I can handle that."

Short term health insurance plans are able to keep their monthly costs low because the deductibles are often so high. For someone like Billick, that means she must pay $2,500 out of pocket before her short-term health plan kicks in. And as with most-short term plans, prescriptions aren't covered under Billick's policy. That means a simple strep test and antibiotics could cost hundreds of dollars instead of the minimal co-pay for the doctor's visit and medicine under Cobra.