Fall signals many things – the changing color of leaves, pumpkin spiced lattes, and health insurance open enrollment season. Contrary to popular belief, consumers who receive health insurance through their employer have additional insurance options just like individuals who purchase health insurance on their own. Today all health care consumers have many choices when it comes to health insurance plans, but they might not know about the variety in the marketplace, or what coverages they might need.
This article will take a look at individual health insurance, plus other insurance options such as supplemental insurance, short term health insurance, Christian sharing ministries and more.
Supplemental Health Insurance
Accidents and critical illnesses can happen anywhere, at any time. Due to the unexpected nature of an accident or a sudden life-changing diagnosis, large medical bills totaling in the thousands can stack up quickly. Supplemental insurance helps families by providing cash for accidents, illnesses, daily hospital expenses and even disability income due to lost wages. Starting at around $1 per day, supplemental insurance offers “insurance for your insurance” protection. Supplemental insurance comes in all shapes and sizes (from one accident policy to a combination of bundled benefits for accidents, critical illnesses, hospital benefits and more) so it is good to analyze any plan’s details to see which type of supplemental health insurance is right for you.
Marketplace Exchange Plan
Prior to the Affordable Care Act those who purchased their own health insurance could buy major medical insurance, and if they had a pre-existing condition, they were given the opportunity to join a high-risk pool in most states. With the introduction of Obamacare, those with pre-existing conditions could no longer be discriminated against and could join the same pool as everyone else for the same price. No one could be dropped by their insurance carrier or have their rates adjusted due to claims history. This fulfilled one of the Affordable Care Act’s main objectives of reforming the private insurance market.
Individual health insurance plans are now required to cover “essential benefits,” namely specific services and preventive care which include:
- Ambulatory services for patients
- Emergency services
- Maternity and newborn care
- Mental health and substance use disorder services including behavioral health treatment
- Prescription drugs
- Rehabilitative and habilitative services and devices
- Laboratory services
- Preventive and wellness services and chronic disease management
- Pediatric services, including oral and vision care for children
These required services are available on both marketplace plans and private insurance plans. Other advantages that came from the Affordable Care Act were the expansion of Medicaid qualifications in some states and expanded coverage for babies and children.
Private Insurance Plan
With the law in place, the insurance market divided into “marketplace plans” and “private insurance plans.” Marketplace plans can be purchased on the federal exchange or through a state marketplace and consumers with qualifying income can receive tax subsidies to help lower their monthly health insurance premium. Those that do not qualify for cost assistance can purchase either on the marketplace or buy private insurance plans directly from an insurance carrier. There are typically more plan options in the private insurance sector compared to the marketplace, and doctor networks can be larger.
Think that’s all there is to health insurance? Far from the truth. Employees with group coverage and self-employed individuals have access to other types of health and supplemental products that can be lower in cost or provide additional insurance coverage for their families. Here are some of the most popular:
Christian Sharing Ministry
It’s not cost, it’s principle. While cost is a reason many seek out Christian sharing ministries as an alternative to Obamacare, the organizations themselves focus on building a community of individuals who share a common faith and are against birth control or abortion in states that permit the procedure.
Christian sharing ministries don’t cover pre-existing conditions or preventive medical services. Some require payment into a central administrator while others ask members to send their monthly payments to other families with needs. (And prayers of support and healing are often included.) Part of the “faith-based” element of Christian sharing ministries is trusting that other families will help you cover your medical bills. Since it is not an insurance plan, there is no regulation to require members to pay their bills. However, since these types of organizations fall under the Affordable Care Act’s exempt list, members are not subject to the tax penalty.
Fixed Indemnity Plan
A fixed indemnity insurance plan pays a set amount of cash for services and procedures. For many, fixed indemnity insurance is an easy add-on to an existing insurance plan if they know they will experience hospital stays or other types of care during the course of a year. It’s important to review fixed indemnity policies carefully, as coverage varies by plan. Some plans only offer cash benefits for illness and injury, but not hospitalization, while others include hospitalization, surgery and prescription drug benefits. If marketplace or private insurance is not an option to your family due to cost, fix indemnity plans could provide some protection from medical occurrences that might happen over the course of a year. However, the product does not comply as a qualifying health plan under the Affordable Care Act, and if purchased on its own, is subject to a tax penalty.
Short Term Health Insurance
Short term health insurance, also known as temporary or term health insurance is an option for those who experience any “life event” that leaves them without individual health insurance. Candidates for short term typically include:
- The uninsured;
- Those in a transitional period; or
- Loss of employer coverage;
- Cannot afford COBRA coverage;
- Want an Obamacare alternative;
- Current student or recent graduate;
- Bumped from parent’s plan at age 26;
- Early retiree who doesn’t qualify for Medicare.
Short term health insurance can be purchased for up to six months, and in many states, up to 364 days. For individuals who don’t know when their financial status will improve, short term insurance can provide some protection while life’s kinks work themselves out. Like fixed indemnity insurance, short term medical is not a qualifying health insurance product, and thus, is subject to a tax penalty.
While the health insurance sector can be confusing or seem limited in options, take a look at what might best benefit your family in 2017.