As 2017 ends, many of you are experiencing sticker shock from the increased cost of your health insurance plans. Recent reports show family plans increased significantly this past year and many grandfathered plans were eliminated. It was not uncommon for insurance plans to see increases from $500 to more than a $1,000 a month. As these plans have increased many people are looking for affordable alternatives to meet their healthcare needs. As of 2016 over a half a million people have turned to health-sharing plans over traditional health insurance plans. With the growth, popularity and acceptance of these plans it is important that consumers are presented with accurate information. Below are 5 things you should know about health-sharing plans.
1. Health-Sharing plans are not health Insurance.
The goal of both insurance companies and health-sharing plans is to provide a way for you to pay for your healthcare. They approach it from different angles. An insurance company pools premium and pays providers through a pre-arranged process. In the past many of the health-sharing plans had the participants pay for and negotiate prices directly and were reimbursed through members. This is where the health-sharing name came from. In the last couple of years at least one of these health-sharing plans has dramatically changed how health-sharing plans operate. They have a network of doctors and hospitals and co-pays just like insurance. They also negotiate prices based on a network of over 1 million providers. Since 1993 according to the National Organization of Life and Health Insurance Guarantee Association there have been 72 Life and Health Insurance companies that have been turned over to the state insurance departments for impairments or insolvency. In contrast there have been no cases, that I could find, where a health-sharing plan has been insolvent. It appears the health-sharing plans do a much better job managing their finances than the regulated insurance companies. It is also worth noting that some of the health-sharing plans communicate with state health insurance departments, and although they are not directly regulated by the insurance departments they are regulated by other agencies. The final benefit of health sharing plans is that since they are not insurance they are not required to provide unnecessary provisions in the plan that add to the cost. Consumers can choose what they want in their healthcare plan and not be required to purchase items they do not need or want.
2. Health-Sharing Plan Participants Have Legal Protection.
To say that health sharing plans don’t provide legal coverage is a fear statement designed to keep people from purchasing these plans. Health sharing plans have valid contracts and clear statements of what they will cover and will not cover. In cases of disputed plan participants have legal protection because the case would be evaluated by a court of law. It has been my observation that health-sharing plans provide as much, if not greater explanations of what the plans cover and in much clearer language than traditional health insurance plans. The key with both insurance and health-sharing plans is to understand the contract and what it covers before you commit to either. But with both, as it is a written contract, you do have legal protections.
3. Health-Sharing Plans Provide Actual Savings.
This is where you must do your homework. Health-sharing plans vary in what they provide. Some are more catastrophic in nature, while others are more comprehensive. For example, some plans do not cover preventative health procedures or annual physicals. Some require member to cover the first $300 of any medical procedure. On the other side you have plans that cover all the ACA (Affordable Care Act) medical services recommended by the USPSTF and outlined in the ACA for preventive care. There is zero out of pocket expense and no deductible to meet for any scheduled preventive care service or routine in-network check-up, pap smear, flu shot and more. It’s easier to stay healthy with regular preventive care. They also provide unlimited telemedicine at no additional cost to provide you with direct access to a licensed medical professional 24/7/365. Medical lab work is another area that is significantly different between these plans. Some do not provide any provision for lab work, while others cover them completely. Some provide a network of doctors and hospitals with significant savings and some still rely on you to negotiate your own terms. These can add to the cost of these plans, but they are still significantly less than traditional health insurance. It is also about providing consumers with choices. You can choose a bare bones plan to cover only your catastrophic illness or you can choose a more comprehensive plan. The key is to understand both the total cost and what you will be responsible for outside of the plan.
4. Coverage for Pre-Existing Conditions
It may come as a surprise, but even large, traditional insurance companies offer plans that do not cover pre-existing conditions. When the Affordable Care Act (ACA) plan was passed the policies included mandated coverages in them that many consumers did not need or want. They also mandate that insurance companies cannot exclude people from coverage based on a pre-existing condition. But if you have no pre-existing conditions or can manage your pre-existing conditions then why would you choose to pay for everyone else that has medical conditions. Now let me share how one of the health-sharing companies deals with pre-existing conditions. Apart from cancer, a health-sharing plan can choose to cover a pre-existing condition after a two-year waiting period. A pre-existing condition is defined as a health event/condition for which you have taken prescription medication for in the past two years. Any major health care event, associated with this condition, would not be covered if it takes place within the two-year waiting period. The health-sharing plan would provide your annual physical, prescription drugs and lab work to monitor your condition and after the two years you no longer have the restriction on pre-existing conditions. If you are dealing with cancer you are best choosing an ACA plan. The reason is mathematical. You have a higher probability of a recurrence of cancer and for this reason once you have cancer most will not cover it in the future. Health-sharing plans are not for every consumer. The fact that they are transparent on what they cover and what they do not should be refreshing. Also, if you had an expense that was likely going to cost a significant amount in the future you can switch to ACA plan in the future during their annual enrollment period. The bottom line is if you do not have any pre-existing conditions or they are well managed then a health-sharing plan might work well for you.
5. Member Share Responsibilities vs. Insurance Deductibles
Member share responsibilities are what you are required to pay according to your policy. They differ by provider, but are like the deductibles with a health insurance company. Under older health sharing plans the member was responsible for the cost of the medical care and would be reimbursed for the difference between the member share responsibility and the cost of treatment. This has changed, and most newer plans have a co-pay like traditional insurance plans when you visit your primary care physician and the member share responsibility comes into play when admitted to the hospital or outpatient surgery. It works just like traditional insurance plans. The hospital bills the health-sharing plan for the total cost, less your member share responsibility (deductible). The language may seem different, but it accomplishes the same objective. As with traditional health insurance it is critical to understand what your plan covers, where you need to go to seek treatment, and your cost whether it is a deductible, co-pay or member share responsibility. So, when you think of member share responsibilities think of your traditional deductible and read your policy or contact your representative for coverage.
A Health-Sharing plan is an affordable and reliable option to high priced ACA health insurance coverage. Think of it as a different way of paying for your health care needs. Health insurance companies do not provide any treatment, they only provide a means of paying for it. Health Sharing plans provide the same at a much more affordable cost. It is very important that you evaluate and understand all the conditions of the plan and how they provide payment for coverage before you purchase. This cost and coverage can vary greatly between these plans. It is not any different from a health insurance plan that provides different coverage at different costs. I would encourage you to find a plan that not only meets your budget, but provides you with the protection that benefits your family. For many individuals and families, a health-sharing plan offers affordability, portability and customization. Check out the options to see if this type plan is right for you. If you have any questions, please feel free to contact me directly and we can discuss your situation and help you evaluate the best options for your healthcare needs.