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Alternatives to High Priced Health Insurance Plans


Everyone knows health insurance is an absolute necessity.  But there's a problem:  For a growing number of consumers, health insurance is simply not affordable.  According to Peterson-Kaiser, pricing for health care is growing faster than prices in the general economy.  Since the end of 2007, healthcare prices have grown 21.6%, while prices in the general economy (measured by the GDP deflator) have grown 17.3%.  According to the Congressional Budget Office (CBO), premiums for benchmark plans - i.e., the second-lowest-cost silver plan listed on ACA exchanges - are expected to rise by 15% in 2019, and then average a 7% increase in 2020 and every year thereafter, through 2028.

Some experts consider these estimates to be conservative.  Being unable to repeal and replace the Affordable Care Act outright, The current administration has been chipping away at many of the ACA premium containment components.  The result of these actions will almost certainly lead to runaway increases in health insurance premiums for all ACA plans.

The good news is, ACA health insurance plans are not the only health plan option available to you.  There are other lesser known options that may be the perfect fit for your needs.

Health Plan Alternatives.

Healthcare sharing plans / Faith-based health plans

Increasingly, families across the nation are making the switch to a lesser-known healthcare option:  healthcare sharing plans.  Healthcare sharing plans, (also known as faith-based health plans, faith-based health insurance, or healthcare sharing ministries), are one of the fastest-growing healthcare options in the nation, but chances are, you've never heard of them.  Below, we'll walk you through some of the important information you need to know about this fast-growing healthcare option.

The advent of healthcare sharing plan.

Healthcare sharing plans (faith based plans), have grown exponentially beyond what anyone could have possibly imagined, when such plans were exempted from the Affordable Care Act health plan requirements.  At the time, the exemption was a way to sooth objections from conservative leaning congressmen who had reservations on the passage of the ACA.  This exempted niche, is now a fast-growing segment of the health plan industry.  From all appearances, this trend will continue well into the foreseeable future.  What was once a fringe idea, limited to devout Evangelicals and rural churches has found acceptance with a wide swath of the American populous.

How do these faith-based plans work?

To put it simply, healthcare sharing is about like-minded people voluntarily coming together to share the burden of medical expenses.  Healthcare sharing plans are typically faith-based, meaning the core concepts are based upon religious beliefs.  However, in most cases, consumers do not need to be affiliated with any religious group, or be religious at all, in order to purchase a faith-based health plan.  Faith-based health plans are not considered insurance and are not regulated by the department of insurance.

These plans are designed to accomplish the same fundamental goals as traditional health insurance:

  • Help people maintain good health by offsetting the costs of health care access.
  • Assist people with the cost of medical bills.
  • Protect people from catastrophic financial loss due to major medical expenses.

The mechanics.

The workings of faith-based health plans offered by various entities are quite similar.  Each month all the members pay a set contribution or "share" amount.  This contribution is based on the health plan style they have purchased.  Other factors that may contribute to what the contribution will be are age, gender, and health history.  Contributions are placed into a pool and managed by the healthcare sharing company.  The funds are "shared" with members who have immediate medical bills, according to their chosen plan and company guidelines.

Good to know:  When it comes to dealing with your medical insurance company, forget the touchy-feely commercials and go with your head.  Don't buy the advertising hype.  The primary function of multi-billion dollar insurance companies is to make more billions for themselves and their investors.  This means that when you deal with your insurer, you need to remain objective and check your emotions.
Advantages of Faith-Based Healthcare Sharing Plans.

Because Faith-based health plans do not fall under Affordable Care Act regulations, there is enormous flexibility in plan structure.  This is one of the factors that contribute to a lower monthly premium when faith-based health plans are compared with traditional health insurance plans with similar benefits.  Another contributing factor to lower premiums is the comparative lack of bureaucracy within entities that offer faith-based health plans.  Insurance companies in the U.S. have had over a century to build up a virtual mountain of bureaucracy.  The stifling bureaucratic excess is invariably passed on to the consumer, in the form of high plan premiums.  Also, in many cases, the lack of bureaucracy, translates into your physician, medical facility, or hospital being paid much more quickly for services provided.  Consequently, medical providers generally like health care sharing plans.

Disadvantages

One big advantage of an ACA backed plan is you cannot be declined coverage due to health issues.  Healthcare sharing companies can choose to decline coverage to any individual due to medical issues or history. Also, certain ACA plan benefits and protections are mandated by law.  Some benefits, like maternity, for example, may be very important to you.  Your faith-based plan may not offer it.

There are also lifetime maximum benefit limitations with most any faith-based health plan.  ACA plans have no such limitation.

For these reasons, faith-based healthcare sharing plans are not the perfect alternative healthcare plan solution for everyone.  Whether or not a faith-based plan makes good sense, depends upon your medical and financial circumstance.  Be certain to understand benefits and limitations thoroughly, before purchasing any faith-based plan, or traditional health insurance plan.

For more information on Faith-Based / health care sharing ministries, please contact us directly.

Good to know:  Ask questions.  If you don't understand the details of the plan offered, contact the insurance company or give us a call.  While there are a variety of online tools and resources that can help, the best thing to do is simply pick up the phone and talk to an insurance professional.  You need to clearly understand what you're buying.

Short Term Health Insurance

Yes, short term health plans are insurance plans.  However the plan structure, enrollment guidelines and cost of short term health insurance is so different, considering short term insurance as an alternative health insurance option is warranted.

So, what is short term health insurance?

The first thing to do is define short term health insurance.  There are two parts to this: What short term insurance was, and what short term insurance is today.

Initially, short term health insurance was designed just for short term situations.  As the name implies, it was a health insurance plan with a short term duration, which ranged from several months to a year.  This type of insurance was for individuals who needed temporary medical insurance or could not afford traditional health insurance.  It was used mostly by employees who frequently changed jobs, employees waiting for their group health insurance plan to kick in, students going out of state to college, or young adults searching for their own insurance because they were no longer covered under their parent's plan.
Insurance coverage was strictly for hospitalization.  Doctor visit benefits, preventative services, or prescription drug benefits, were unheard of.

Things have changed.  There are short term health insurance plans that now offer doctor visit copay benefits, preventative services, prescription drug benefits, and more.  Some of these plans can provide coverage for up to three years before a new application is needed.  For these reasons and more, short-term health insurance is becoming an ideal health insurance solution for a growing number of U.S. families.

Short term health insurance plans are affordable, and the plan benefits have vastly improved from what was offered in the past.  However, short term health insurance is not for every circumstance.  It lacks several of the guaranteed benefits that are part of the Affordable Care Act portfolio of plans.

For more information on health plan options that are available to you, give us a call.



Other articles:
Explaining the Growth of HealthCare Sharing Plans.
5 Strategies For Reducing Medical Bills.
Resources