Affordable Health Insurance Alternatives – 4 Options to Consider

A health insurance plan is crucial for families and individuals to ensure access to quality health care and offer protection against expensive medical procedures. It also gives you access to a network of qualified healthcare providers. Studies show that health insurance plans improve your health outcomes significantly.

However, with the increasing cost of health insurance each year, many people cannot afford traditional health insurance. This article will discuss the 4 affordable health insurance alternatives to consider.

Care Membership Plan

Primary care membership plans are also referred to as concierge medical service or retainer medicine. A direct care membership plan pays your primary healthcare provider a monthly fee to access various healthcare services.

Think of it like a gym membership whereby you pay a monthly fee to a specific primary care physician or health care provider to access standard services. It covers you for basic medical services such as doctors’ visits, lab work and blood tests, and some prescription drugs. 

In most cases, the monthly fee is much lower than the payable monthly premium for private insurance. That said, the exact cost of care membership plans varies from one health provider to another.

On the downside, primary care memberships do not cover specialist consultations, hospitalization, surgery, and other costly medical services. Some people opt to combine primary care memberships with a high-deductible, low-premium health plan for more comprehensive coverage.

Medical Cost Sharing Programs

Medical costs sharing programs work such that a group of members come together to create a fund that supports them in paying their medical expenses. Like traditional insurance, you pay a monthly premium to contribute to the fund.

However, instead of the fund directly paying the health care provider for your medical costs, you pay out-of-pocket, submit a claim to the program, and then the program reimburses you.

One of the main advantages of a medical cost sharing program is you enjoy huge discounts on your medical services. Most providers charge less or offer huge discounts when you pay for services upfront. On the downside, you will need to have money at hand when seeking health care services to pay upfront.

Medical cost sharing programs are a great option for you if you cannot afford traditional health insurance and you do not qualify for government medical insurance programs for middle and low-income families.

It is also a great option as short-term coverage if you missed the open enrollment period for the current year or if you want catastrophic coverage. It works best if you are generally in good health. Self-employed individuals and freelancers find this option quite useful.

Note that most medical cost sharing plans are religious-based. Although they do not have strict enrolment criteria, you are required to live a generally healthy lifestyle. Some programs have alcohol and tobacco limits, whereby you are charged extra if you use alcohol or tobacco. Also, some do not cover pre-existing conditions.

High-Deductible Health Plans (HDHP) and Health Savings Account (HSA) Combination

According to the IRS, a health plan is considered deductible if the stipulated annual deductible is $1400 or more for an individual or $2800 or more for a family.

HDHP plans have a higher deductible than traditional insurance plans but much lower monthly premiums. However, they have high out-of-pocket expenses. Combining HDHP and HSA makes out-of-pocket expenses affordable.

HSA is a tax advantage account that saves part of your pre-tax income towards medical expenses. Your contribution limit is determined by your monthly income and the number of months you are allowed to contribute. Contribution can be rolled over to the next year. They accrue interest and remain tax-free.

Therefore, an HDHP/HSA combination is a good middle ground between traditional insurance plans and more affordable options. The combo allows comprehensive health care coverage with a low premium health plan with out-of-pocket costs paid through the HSA.

It is a great option for catastrophic coverage and works best if you are in good health and hardly fall sick. On the downside, incurring a large medical expense can drain your HSA savings quickly.

Short Term Health Insurance

Short term health insurance plans are short term health coverage plans, typically 1-12 months. They are essentially temporary plans before you get primary insurance coverage. For instance, if you are between jobs, a recent college graduate, or you missed the open enrolment period for traditional insurance plans.

These health plans are generally more affordable as they have lower premiums compared to traditional health insurance. However, they have limitations and exclusions on the extent of coverage. For instance, they typically do not cover pre-existing conditions or may have coverage limits for certain medical services such as prescription drug coverage and maternity care.

Some have additional costs, such as out-of-pocket expenses, copays, and deductibles. Since they are temporary plans and non-ACA compliant, you will eventually need to get a more comprehensive and long term plan. Some short insurance plans allow you to renew your policy for up to three years, while others offer coverage for a maximum of 365 days.

Conclusion

If you are on a tight budget or unemployed, there are various affordable health insurance options than traditional health insurance. They include care membership plans, medical cost sharing programs, HDHP/HAS, and short term health insurance. These options have lower premiums, which makes them more affordable.

Most of these are great options if you are generally in good health. Consider your needs and budget to determine which would suit you best. If you are unsure which one to enroll in, consult a health insurance agency or advisor for assistance. However, keep in mind that most have limitations and exclusions.