The Thursday Night Call
You are sitting at your kitchen table in Orland Park. The kids are asleep. The stack of bills from Silver Cross Hospital sits there, unopened. Your heart pounds. What if something happens tomorrow?
I have taken this call a hundred times. Maybe more.
Here is the truth nobody tells you about short term health insurance. It is cheap. It is fast. But it is also a bet – one you need to understand before you sign that application.
The Real Story Behind “Short Term”
Let me walk you through a case. Last year, a client – let us call him Mike – came to me. He had just left his W-2 job at a logistics firm near 143rd Street. COBRA would cost him $780 a month. He said, “I just need a bridge, Dave. Three months.”
We looked at a short term plan from Carrier A. The premium? $189 a month. Fantastic, he thought.
But here is where things get tricky. Short term plans do not cover pre-existing conditions. Mike had high blood pressure. He took a pill every morning. Under the plan’s fine print, any “related condition” – a stroke, a heart episode – would be denied if traced back to that diagnosis.
I asked him, “Are you willing to self-insure that risk?”
He paused. Then he signed the waiver.
The Orland Park Reality Check
You live here. You know our winters are brutal. One icy fall on LaGrange Road. One ambulance ride to Palos Health. That bill can hit $15,000 before you even see a doctor.
Here is the mechanism:
Short term plans use per-occurrence deductibles. Not annual. You fall. You pay $5,000. You break another bone next week? Another $5,000.
They cap payouts. Many max at $500,000. Sounds like a lot. But a three-day ICU stay? Cardiac surgery? You will burn through that in a week.
Tax trap – and this is the killer. Premiums for short term plans are not tax-deductible if you are self-employed. Not like ACA plans. You pay with after-tax dollars. Uncle Sam takes his cut first.
So that $189 plan? Its real cost, after taxes and risk, is closer to $250. And that is before you need it.
The Comparison You Must Make
Carrier B offers a similar plan. Lower premium – $165. But read the elimination period. Fourteen days. That means if you get sick on day one, you pay everything out of pocket for two weeks. Appendicitis on a Tuesday? That is your loss.
Carrier A has a seven-day wait. Higher premium. But faster protection.
Which one is right?
If you have savings – take the longer wait, lower premium. Self-insure the first two weeks.
If you live paycheck to paycheck – pay the extra $24. You cannot afford the gamble.
Three Mistakes I See Every Month
Mistake one: “My employer’s group plan is too expensive, so I’ll just do short term.”
You are comparing apples to hand grenades. Group coverage pays. It has out-of-pocket maximums. Short term plans do not. They can deny, delay, and disappear. I have seen a claim rep ask for three years of medical records for a sprained ankle. This is not a bug. It is a feature.
Mistake two: “I’m healthy. I don’t need real insurance.”
Health is not a permanent state. Remember Mike? Three months into his short term plan, he felt a lump. Biopsy? Denied. “Benign condition not covered due to potential chronic development.” The words still make me angry.
He paid $4,700 out of pocket. For one test.
Mistake three: “I can just renew forever.”
Illinois law says you cannot. Most short term plans cap renewals at 36 months total – often less. After that,you are uninsurable if something popped up on your record. And the insurance company will share that data. Every application becomes a nightmare.
Your Next Step – Not the Obvious One
Do not go online and click “buy now.” That is what the carriers want. They make the application ten questions. They approve you in five minutes. Because they know you will not read the exclusions.
Here is what I tell my Orland Park clients:
1. Get the actual contract. Not the summary. The 40-page document. Search for “pre-existing condition limitation period.” That is where they hide the teeth.
2. Call two hospitals. Ask Silver Cross and Northwestern Medicine Orland Park if they accept the plan’s PPO network. Short term networks are often phantom networks. Providers say yes online. Then at check-in? “We are out of network.” That is a 40% surcharge on every bill.
3. Run the nightmare math. What happens if you need a $60,000 surgery? The plan pays $40,000. You owe $20,000. Can you pay that? If not, short term is not for you.
4. Consider a catastrophic ACA plan instead. The premium is higher – maybe $350 a month. But there is no lifetime cap. No pre-existing denials. And the tax deduction? It lowers your adjusted gross income. For a self-employed person in Orland Park, that can save you $4,000 a year.
The Bottom Line – Told Straight
Short term health insurance has a use. It is for the person with cash reserves and low risk tolerance. The contractor between jobs. The early retiree waiting for Medicare. The healthy twenty-something with a trust fund.
For everyone else? It is a Band-Aid on a bullet wound.
I still see Mike sometimes. At the Jewel on LaGrange. He waves. He has a real ACA plan now. He told me, “I would have gone bankrupt. I just didn’t know.”
Now you know.
So close the browser. Step away from the “instant quote.” Call a broker. Call me. Call anyone who will read that 40-page document with you. Because the cheapest plan on the screen is never the cheapest plan in real life.
Isn’t that the point?