Understanding the Importance of Health Insurance 90 Day Waiting Period

Understanding the Importance of Health Insurance 90 Day Waiting Period

When you sign up for health insurance, it’s not uncommon to encounter a waiting period before your plan’s coverage kicks in. A 90 day waiting period, for instance, is a common requirement among most providers.

While waiting periods may seem like an inconvenience, they serve an important purpose. In this article, we’ll discuss the reasons behind the 90 day waiting period and why it matters.

What is the 90 Day Waiting Period?

A waiting period is the time between when you enroll in a health insurance plan and when your coverage actually begins. During this time, you’re not eligible to receive benefits or coverage for any medical expenses you incur. The length of a waiting period can vary depending on the insurance provider and the type of plan you choose.

The most common waiting period in health insurance is 90 days. This means that if you enroll in a plan on January 1, your coverage won’t begin until April 1. Some plans may offer shorter waiting periods, while others may require longer periods before coverage begins.

Why is There a Waiting Period?

There are several reasons why insurance companies impose a waiting period on new enrollees:

Prevention of Fraudulent Claims

Waiting periods are designed to prevent people from enrolling in a health insurance plan only when they know they’ll need medical attention in the near future. Without a waiting period, someone could enroll in a plan, immediately receive expensive medical treatment, and then cancel their coverage once their treatment is complete.

A waiting period helps ensure that people who enroll in a plan are doing so for long-term coverage, not just to exploit the system for medical treatment.

Cost-Effective Premiums

Insurance premiums are based on the risk assumed by the insurer. If the insurer has to cover lots of expensive medical claims right away, the costs can quickly add up. By requiring a waiting period, insurers can spread out the risk and reduce the likelihood of sudden and costly claims.

This allows them to offer more affordable premiums to their policyholders.

Encourages Long-Term Coverage

Waiting periods also help insurers encourage long-term coverage. If someone knows they’ll have to wait 90 days before receiving any benefits, they’re more likely to enroll in a plan with the intention of keeping it for the long term.

This helps insurers avoid a situation where people enroll in a plan, receive immediate medical attention, and then cancel once they’ve received the care they need.

When Does the Waiting Period Not Apply?

There are some situations where a waiting period may not apply, such as:

Open Enrollment Periods

During open enrollment periods, waiting periods may be waived. This is because open enrollment periods are designed to encourage people to enroll in health insurance plans, and requiring a waiting period would discourage enrollment.

Qualifying Life Events

Certain life events may qualify you for a special enrollment period, during which a waiting period may not apply. These life events include things like marriage, the birth or adoption of a child, or losing your current health insurance coverage.

Conclusion

While waiting periods may seem like an inconvenience, they serve an important purpose in the world of health insurance. By preventing fraudulent claims, keeping premiums affordable, and promoting long-term coverage, waiting periods help ensure the stability and sustainability of the health insurance industry. So next time you encounter a waiting period, remember that it’s there for a reason and that you’ll have long-term coverage to look forward to once it’s over.