Health insurance is a type of insurance that covers wholly or partly, the medical expenses incurred by the policyholder. The insurance company can reimburse the policyholder, or pay directly to the provider of medical services and products. There are different types of health insurance policies available. These policies are tailored to suit different needs and socio-economic standards.
As the cost of medical services and products continues to climb, there is a resulting increase in the cost of insurance policies and premiums. A lot of consumers are therefore finding it hard to fit the financial burden of health insurance into their budget. At the same time, the reality of the uncertainty of life and health conditions makes it necessary for people to have some form of covering for their health. The need for some form of financial protection when the need arises gave rise to and increased the popularity of alternatives to traditional health insurance policies. These alternatives are known as Health Share programs. Many consumers then turned to health share schemes to secure their health care expenses.
This article will be focusing on the benefits of heath share plans and why consumers are choosing it over traditional health insurance policies.
Traditional Health Insurance
A traditional health insurance policy is also known as an indemnity plan. It is a plan in which the policyholder pays a fee – known as premium – for the service of the insurer. The policyholder in a traditional health insurance plan is responsible for paying premium periodically for health coverage.
Traditional health insurance functions through co-payments and co-insurance. Co-payment is a fixed amount paid by the policyholder out of pocket every time the policyholder accesses medical service. Co-insurance is also paid out of pocket by the policyholder every time the policyholder accesses medical service. However, the difference between both of them is that co-insurance is paid at a fixed percentage and not a fixed amount. Traditional health insurance involves more out of pocket expenses. In exchange for high out of pocket expenses, the policyholder gets flexibility. For instance, the policyholder has complete autonomy when choosing their desired doctors, hospitals, and other health care providers.
Health share plans are different from health insurance plans. Health share plans are cooperatives in which the members agree to cover a certain portion of each other’s medical expenses when it arises. They are usually faith-based cooperatives. It creates a plan based on individual income and budget. For a household, their monthly share is based on the number of people in the household and the age of the oldest applicant. There are several Annual Household Portion (AHP) options available.
They are usually structured like traditional insurance. However, there are major differences in the legal and practical aspects of both of them. One way health share plans are different from health insurance is the process of distributing money to members who file for it. Health insurance companies pay the sum to the health service provider or hospital directly. Some health share plans on the other hand have members giving money to each other to cover medical expenses.
Health share plans are not subject to legislative or regulatory oversight. There is no check and monitoring of their finances, as in with regulated insurance carriers. The flexible nature of health share plans however makes them attractive to consumers all over.
Reasons People Look to Health Share Instead of Health Insurance
There are different reasons people pick health share over health insurance plans. The reasons range from emotional to financial and even personal reasons such as the fact that the plan is not affected by the loss of job because it is not tied to any employment status. We will however examine five major reasons for this decision.
- Health share can accommodate any budget: The flexible nature of health share allows it to accommodate any and every budget. Health share providers provide for rates that are very affordable. Members who switched from traditional health insurance to health share have been able to save a lot of money. The price of health share has been the most attractive feature of the plan. The premiums are well below what insurance companies require.
- Lack of restrictive provider network: Regardless of the fact that some plans have networks with negotiated fees, members can request any doctor or go to any hospital of their choice. The only condition is that the member must bargain for the best possible price of care. If the member needs assistance with the rate to negotiate, the health share plan supplies it. Traditional health care plans on the other hand have a list of hospitals and doctors that the policyholders can visit. These are hospitals where they have already negotiated the best possible prices with.
- No co-insurance: When a member meets the agreed Annual Household Portion on the health share, the member pays nothing for things that are covered under the plan. In a traditional plan, however, co-insurance is also paid out of pocket by the policyholder every time the policyholder accesses medical service.
- No enrollment deadline: Enrollment is the period during which people can purchase health insurance policies. When the period closes, a traditional health insurance plan cannot be purchased. On the other hand, registration for health share is always ongoing. There is no deadline for registration. And a member can join anytime.
- Flexibility: In traditional health insurance, any health condition not expressly agreed to be covered by the policy will not be paid for if the policyholder subsequently develops the condition. However, in a shared plan, developing medical conditions does not terminate membership.
Shared plans might not be for everyone. However, it provides a good and affordable option for people in search of an alternative to traditional health insurance. It comes with its own restrictions and pros and cons. Anyone looking to make the switch from traditional health insurance to heath share needs to weigh both options carefully and receive professional guidance.
If you’re exploring health insurance or looking for alternative healthcare plans, Life Insurance, or supplemental insurance plans feel free to reach out to our professional agents and see what program or programs might be right for you, that can help you through this time. Call Vivna, Inc. today to learn more here: 866.793.2301