As the cost of traditional health insurance rises, some United States residents are seeking health insurance alternatives that provide some protection without busting their monthly budgets. Here are viable health insurance alternatives worth considering in 2020.
The cost of traditional health insurance is on the rise in the U.S.
Primary Care Memberships
Some medical practices and independent primary care physicians provide services for a flat monthly fee, rather such as a gym membership. This is typically referred to as a concierge medical service.
An individual or family can get the usual services offered by a primary care physician, as well as virtually unlimited doctor visits, blood tests, and pediatric care, all with no copay. Of course, such an arrangement doesn’t cover surgery, hospitalization, major injury treatment, or specialist care.
Most individuals who pick this option supplement the primary care membership with a high-deductible, low-premium health insurance plan that covers catastrophic illnesses or injuries.
Medical Cost Sharing Plans
Participants in programs like Medi-Share pay monthly fees similar to insurance premiums. By pooling their resources, they share each other’s medical expenses as they arise. Every member who requires medical services pays an “incident fee,” similar to a copay. The pooled fees cover the remainder of the medical expenses.
These programs often negotiate discounts with primary care physicians and hospitals to keep costs down. The monthly fee is typically less than traditional health insurance while offering similar levels of reimbursement.
Medical cost-sharing programs are from faith-based organizations that exclude some services, like birth control and substance abuse treatment. Otherwise, the programs function much like a regular insurance plan at a lower overall cost.
Still, if you are thinking about a medical cost-sharing program, be sure to read the fine print—very carefully. Some of these programs do not guarantee you will be reimbursed at all for any bills (it might be “voluntary”), and many have very limited per-incident and lifetime caps.
Health Savings Accounts
A health savings account helps cover medical expenses while offering tax advantages.
A health savings account (HSA) can aid cover medical expenses while offering tax advantages. A health savings account should be combined with a high-deductible health plan (HDHP) to cover catastrophic illnesses or injuries.
HSAs are available through many companies, but may also be set up by individuals. Payments made into an HSA are pre-tax deductions, and there is no tax penalty for spending or withdrawing cash as long as it is used to pay medical costs.
Younger adults in usually good health who do not expect to incur much in the way of medical expenses during the year can often make do with a low-premium, high-deductible policy that covers only unexpected major injury or illness. A catastrophic health insurance policy ensures coverage in the event of such unforeseen medical costs while keeping insurance costs to a minimum.
If you have a high-deductible health insurance plan, it makes sense to open (and fund) a health savings account. This enables you to set pre-tax money aside to pay for medical expenses, which effectively gives you an automatic “discount” (equal to your tax bracket) on every bill you pay.
Healthcare is costly, and expenses are expected to keep climbing. Even if you are in perfect health today, you cannot count on staying healthy or avoiding injuries. If you can’t afford a traditional health insurance plan, these choices can help. Still, bear in mind that these are not perfect solutions, and that benefits vary. It’s vital that you read the fine print to precisely understand what type of coverage you’ll have.
Also, most providers provide a discount if you pay for services on the same day you receive them, but you have to ask for it. Many health systems offer financial help—either interest-free payment plans or discounts, usually based on your household income. If you are facing a large bill, always ask about discounts and financial assistance.
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