Alternative Types of Health Insurance

The cost for medical insurance for individuals is becoming increasingly expensive and prohibitive for may to afford. As a result alternatives to individual medical or health insurance can be found to lower the cost of obtaining insurance coverage. Some alternatives may appear similar to individual medical insurance policies but offer different options. The main difference is deciding what types of benefits and coverages are needed.

Short Term Major Medical

This type of plan is designed for people that need short term insurance until other coverage can be obtained. This type of plan is a cheaper alternative to tradition insurance plans. There is typically less underwriting involved which means individuals do not get automatically denied because of certain pre-existing conditions. Coverage is usually only available for one year which may make these plans attractive but not as a long term solution.

Medical Sharing Program

A medical sharing program is is not a medical or health insurance plan. These programs require monthly payments toward a portion of a member’s medical costs. Payments are not set and can change at any time. Many of these programs are offered by church groups or people who want to help each other by pooling their resources.

Health Savings Account

A health saving account is similar to a regular saving account but it it used only for health and medical related expenses. A health savings account can only be used with an approved medical plan such as a Qualified High Deductible Health Plan. The main advantage of a health saving account is that the contributions are tax deductible up to a specified amount. The amount is usually less than 100% of the insurance plans deductible.

Discount Membership Program

A discount membership program is similar to a medical sharing program but requires only a one-time membership fee and a set monthly fee. Another benefit to a discount membership program is that members gain access to various health care providers. Members also receive a discount on many products and services offered by doctors that are included in the network.

Day Limit or Hospital-Only Plans

These type of plans can save individuals money on health costs but do so by reducing the amount of benefits that are provided. A day limit plan has a daily amount that is set for in-house expenses at a hospital. A hospital only plan may not have have a daily amount limit but expenses for out of hospital treatments are typically not covered.