Health Insurance Has Changed Forever

Published on September 27th, 2021

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And that’s a good thing for consumers

The passage of the Affordable Care Act in 2010 ushered in a wave of changes in the insurance industry. Preventive care became a no-cost benefit. Preexisting conditions were accepted without higher rates. Caps on the amount of care were eliminated. A majority of states expanded Medicaid. Healthcare got better for tens of millions of people.

Article Highlights

New laws have reduced the cost of health insurance.

Americans need to get creative when shopping for insurance.

Other options include fixed benefit insurance and short-term medical.

How to use your plan’s benefits to the fullest.

Health Insurance Today

The wave of change continues. In March, the American Rescue Plan was signed into law, helping millions who suffered a sudden job loss or were uninsured during the pandemic to get low-cost, if not free, health insurance.

The result? More than 2.8 million signed up for health insurance while more than 2.5 million people lowered their insurance premiums with more generous monthly financial subsidies.

The protections from the American Rescue Plan have been promised to stay in place until the end of 2022, giving a sense of security into our lives as we wait for the coronavirus to dwindle down and life to return to normal.

Employment has also changed in the wake of the COVID-19 pandemic. According to the most recent US Pulse Survey, 65% of employees are looking for a new job. Other surveys have shown similar statistics. Workers reported looking for new opportunities and schedule flexibility were some of the top priorities driving their desire for change.

It seems individuals are looking for fulfillment over higher pay, signaling many might turn to the gig economy instead of another 9 to 5 job, which requires additional freedoms to match a flexible lifestyle.

But there’s still a gap when it comes to flexible and affordable health insurance. Those who purchase their own health insurance and do not qualify for financial subsidy assistance must pay the full premium price for their ACA plans. This is why it’s time for gig workers or business owners buying their own health insurance to get creative.

Where Health Insurance Is Going

We have been fed to believe we need a health insurance policy just like we need car insurance. But think about your car insurance – it most likely isn’t one policy but many. There’s liability coverage, an umbrella policy and maybe a rider that rounds it out. Health insurance should be the same. 

Nearly 50% of Americans get health insurance through work. Employer’s typically subsidized the plan premium while employees pay the balance from their paycheck, plus all out-of-pocket costs until the deductible is met. 

Unless life insurance is included, that is usually the only health insurance a person will have. But if the deductible is out of reach (say $7,500), it’s almost pointless to have the insurance at all.

Why? Due to the ultimate out-of-pocket cost, the policy won’t be used for everyday medical care. This is an example of when you should consider adding another policy to existing coverage – a low-cost supplemental plan. These kinds of plans help cover medical bills if there’s an accident or if you are diagnosed with an unexpected illness.

If you cannot get insurance through work and buy your own health plan, you have options to create healthy insurance coverage. 

If you qualify for a tax subsidy to reduce the monthly premium cost of your health insurance, you should enroll in an ACA plan. But if the deductible is more than you can afford, you can also add a supplemental plan, many times for less than $50 a month.

If you don’t qualify for a financial subsidy, you still have options that are affordable, flexible, portable and permanent.

Fixed Benefit Medical Insurance

Fixed benefit insurance plans are a permanent alternative to ACA plans that offer defined benefits for doctors, hospital stays, and more.

If you are fairly healthy and don’t need expensive services like ongoing medical treatment or pregnancy coverage, a fixed benefit plan lets you choose how much coverage you want rather than dictating the services you pay for. There’s no deductible. 

If you go to a doctor, you either pay cash upfront and get reimbursed, or the doctor’s office submits the claim for you. Then you are sent the total bill for the service. 

Paying for healthcare upfront also lets you know how much a cash-pay option will be before your appointment, taking the guesswork out of how much the visit will cost. 

How does a fixed benefit medical plan compare to an ACA plan? You might be surprised.

  1. Fixed benefits pay on the first $100 of medical claims. ACA plans normally don’t pay until you reach your deductible, which can be $5,000 or $10,000 out-of-pocket.
  2. Fixed benefit plans keep your premium costs the same when your income rises. You lose subsidy dollars on ACA plans when your earnings go up.
  3. Fixed benefit medical plans have stable pricing. Premium rates are adjusted in “age bands.” ACA plans increase in cost every year you age.
  4. There’s no network with a fixed benefit plan. You can see any doctor. Most ACA plans have a network you’re committed to, otherwise, you pay out-of-network pricing, which is steep or not covered at all. 
  5. Fixed benefits offer an opportunity to negotiate provider charges when paying cash. ACA plans are locked into pre-negotiated terms with networks.

Short-Term Medical Insurance

If permanent insurance isn’t your best option, short-term health insurance is another option. Short-term plans can cover you for up to 12 months, and depending on your state, a maximum of three years. Short-term plans can be a great option for three groups:

  • Students going to school out-of-state.
  • Early retirees not yet eligible for Medicare.
  • People in-between jobs and in need financial protection while they decide on their next steps. 

Short-term health insurance has the typical structure of a health plan. It has a deductible that has to be met first in most cases, coinsurance and in some cases, copays.

It’s flexible. You can build your policy based on the desired deductible or total amount of coverage you want. And, because it’s temporary, pricing is remarkably affordable. 

Supplemental Insurance

Now that you have your main health insurance policy covered, you still might be leery about paying doctor bills or meeting a deductible more than $1,000. With supplemental insurance, you’re covered from unexpected accidents or critical illnesses.

These plans are not meant to replace your coverage. Instead, they bridge the gap between what you have to pay before your short-term medical benefits begin or supplement fixed benefit plans. The end result? Your overall coverage is more robust. 

Plan coverage ranges from several thousand dollars to $5,000 or more, allowing you to once again, customize your insurance coverage and let you buy what you need and skip what you don’t. 

Utilizing The Extras

I can’t stress how important it is to use all of your plan benefits, not just the insurance coverage. Many policies come with non-insurance benefits like prescription drug discounts and free or reduced telehealth services.

If you want to cut your health insurance costs, use these extra services, especially when you need preventive or urgent care. Seeing providers through a Zoom chat can cost half the price of a visit to the doctor. Discount pharmacy cards can drop prescription drug costs anywhere from 10% to 50%. 

Health insurance has changed forever. But it requires you to be an advocate for yourself and get creative.

You don’t have to purchase big major medical insurance, especially if you don’t qualify for a financial tax subsidy to lower your monthly premium cost. Instead, consider bundling your coverage together that keeps you protected and reduces your out-of-pocket premium expenses. 

The views and opinions expressed are those of the authors and do not necessarily reflect the official policy or position of or HealthCare, Inc. 

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