Health insurance can be quite confusing. Many people stick with whatever health insurance plan their employer offers without exploring any options. It is the easiest, most accessible plan available to them and is very likely the most affordable, especially if the employer chips in to contribute towards your premiums.
Still, what about other health insurance options? What if you don’t have a plan sponsored by an employer? Or, what if your employer doesn’t chip in to make your premiums lower? Is it worth exploring other options?
One plan that may not get as much attention as it deserves is the health care sharing plan. In this kind of insurance coverage, the plan members share the cost of medical expenses with each other. This type of plan is a way to save on health care costs, while collectively helping others.
Find out if a health care sharing plan is right for your life
Since these plans shares costs among its members, these kinds of plans tend to be selective in who they allow to enroll. Most won’t cover anyone with preexisting conditions, and many also refuse people who smoke or drink alcohol. The idea is to keep everyone’s need for care as low as possible so that the expenses that need to be shared will remain low.
Monthly premiums go toward those sharing costs. This is the big benefit of these plans as premiums are often low but could range from $60 to over $600 a month. There is also a minimum payment before your sharing cost coverage will kick in. This is similar to a deductible in a standard health insurance plan. You need to cover your own health care fees up to a threshold (typically around $500 for single people and more for couples and families), and then the sharing plan will help you with the remaining expenses.
Who should consider these plans?
Health care sharing plans typically only work in specific situations. Often, they are affiliated with religious groups or organizations, but you don’t always need to be a member to join. The truly limiting factor is how selective they are with who they will enroll.
As said, they often don’t take anyone with preexisting conditions to avoid a heavy sharing burden on the other members of the share plan. These plans often look for people in good health that live a healthy and moral lifestyle.
If you fit that description, a health care sharing plan could be useful, especially if you’re looking for a plan with lower premiums and only want coverage for catastrophic events. It’s also a good option for those who don’t have access to health insurance through an employer or missed the open enrollment period.
For most, health care sharing plans aren’t the best options, but they can be an ideal alternative for the right person.
Why are you looking into health care sharing plans? What is the most appealing factor for you?
Nancy Zambell has spent 30 years educating and helping individual investors navigate the minefields of the financial industry. As a lecturer and educator, Nancy has led seminars for individual investors at the National Association of Investors, Investment Expo and the Money Show. She has also taught finance, economics and banking at the college level, and has been quoted extensively in The Wall Street Journal, Investor’s Business Daily, USA Today, and BusinessWeek. Now let her give you the tools and resources, including a monthly magazine, for gaining the peace-of-mind to live comfortably now and in retirement in her Cabot Money Club.Learn More >>