Getting to Know the Best Alternatives to Traditional Health Insurance Plans

Since traditional health insurance plans are expensive, many people look for alternatives to a traditional health insurance plan that can protect them in case of emergencies. While each of these alternatives have their pros and cons, it is always better to be informed about the available options.

Cost-sharing Programs

These plans require its members to pool their resources to share the medical costs. Members have to pay monthly fees that are generally lower than a traditional health insurance plan. After the member receives medical care, they have to pay a price similar to a co-pay to cover part of the cost, and the rest of the cost is covered at a rate equivalent to a traditional insurance plan. Usually, the covered cost is negotiated by the providers with the hospitals, doctors, and other medical providers. Cost sharing is one of the most preferred alternatives to a traditional health insurance plan.

Medical cost-sharing programs may also be faith-based, wherein the members should have a common religious belief and should adhere to certain rules like avoiding alcohol and drugs. Cost-sharing programs also offer several options with different share requirements. These shares are often based on the number of people in the family and the age of the oldest applicant.

Short-term Insurance

These programs offer coverage for a period of a month to a year. They work similarly to long-term health insurance programs but do not meet the essential benefits requirements to satisfy the mandates of the Affordable Care Act. These plans are usually a low deductible and provide coverage irrespective of whether you get treatment in or out of a provider network. Also, there is no open enrollment period for short-term insurance plans. The premiums, too, are much lower than traditional health insurance plans. However, one drawback of these programs is that they do not cover pre-existing conditions, mental health treatment, or the costs of normal pregnancy. But they do cover complications of pregnancy.

Association Health Plans

These health plans cover groups of small businesses and individuals. Farmers, writers, actors, musicians, and other self-employed people are also eligible to join industry-specific association plans. Association health plans offer health coverage for all members at significant savings. These savings are much more than what you would save if you bought insurance on the open market as an unaffiliated individual.

Health Savings Account

Setting up a health savings account is perfect if you have a high-deductible health insurance plan, including one purchased through the ACA health exchange. Money deposited in this account is deductible from your federal income taxes but only up to a set amount. The tax-deductible limit for HSA deductions changes every year. The qualifying health expenses, including co-pays and deductibles, can be paid with a debit card tied to the health savings account. But if you pay using cash or a credit card, you can reimburse yourself from funds in HSA.

But the disbursements from the account are free from any federal income tax. Due to its tax benefits, low premiums, and high-deductible health insurance, it is one of the most cost-effective alternatives.

Health Discount Card

These cardholders get discounted rates on service from participating healthcare providers. However, these cards do not act as insurance; they are only for people who pay cash for medical care. Many medical care providers participate in this, including hospitals, dentists, physicians, optometrists, chiropractors, and others. Having a health discount card means you are eligible for discounts on some prescription drugs. Some cards require an annual or monthly membership fee of less than $10 a month, while others do not require any fee. The major limitation of this option is that you can get discounts only if you get medical care services from in-network providers.

Primary Care Memberships

Certain practices and independent primary care physicians offer their service for flat monthly fees, often referred to as a concierge medical service. Under this program, a family or an individual can get the usual services a primary care provider provides, including pediatric care, virtually unlimited doctor visits, and blood tests. All this is without co-pay, but it does not cover hospitalization, surgery, specialist care, or major injury treatment.

Primary care membership comes with a high-deductible and low-premium. One of the major advantages of this is that it provides unlimited access to a primary physician that you can choose from a specific network of providers. This program works best when combined with an existing health plan. However, a drawback of this plan is that it mostly covers a narrow range of services. Also, it lacks the same consumer protections required by insurance regulators.

Final Thoughts

Although Traditional health insurance policies are available through the Affordable Care Act and have appealing benefits like covering pre-existing conditions and possible subsidies, the premiums for these programs do not fit everyone’s budget. Hence, people opt for lower-priced alternatives that can give almost the same protection at a price they can afford.