The Pros & Cons of Different Types of Health Insurance

Posted on Nov 29 2017 - 7:00pm by Lance Edwards

proconYou have choices when it comes to health insurance. There are variety of different types of health insurance with different features to consider when making your decision. Below is a quick outline of some of the pros and cons associated with four of the most popular types of health insurance. Of the four, three are major medical insurance — Short Term Health Insurance, Affordable Care Act insurance (a.k.a. Obamacare), and employer-based health insurance. All three are creditable coverage in accordance with HIPAA. The fourth type of health plan is Health Benefit Insurance which offers financial protection for commonly needed medical services, including hospital and doctor benefits.

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Short Term Health Insurance


Pros

  • Very affordable premiums that can cost half of what is charged for an Affordable Care Act health plan
  • Premium savings can be used to buy other care such as dental or vision coverage
  • Typically has broad network of healthcare providers and is accepted at many of the top hospitals and cancer centers in the U.S.
  • Applications for insurance can be made any time during the year


Cons

  • No coverage of pre-existing medical conditions
  • Health status and pre-existing conditions evaluated as part of application approval process; applicants can be rejected
  • Prescription drugs may not be covered (or have significantly restricted coverage)
  • Some benefits not covered (e.g. maternity coverage is excluded)
  • Plan is limited to a term of less than 90 days; in most states members can reapply for follow-on plans
  • Enrollees still subject to Affordable Care Act Shared Responsibility Tax

 

Affordable Care Act Insurance (Obamacare)


Pros

  • Required to include 10 essential benefits including mental health and maternity
  • Some people qualify for premium & out-of-pocket costs subsidies
  • No review of health status or pre-existing conditions during application process and applicants will not be rejected based on their health.
  • Broad coverage of many generic, brand name, and specialty drugs


Cons

  • Includes health insurance benefits you may not want or need
  • Often expensive without premium subsidies
  • Very high deductibles
  • Many plans limit enrollees to a narrow network of healthcare providers
  • In many geographic areas, especially rural counties, Obamacare includes only one insurer
  • Cannot enroll in plan outside of annual enrollment period without a qualifying life event (e.g. moving to a new region)

 

Employer-Based Insurance


Pros

  • Often has a broad array of health insurance benefits
  • Lower premiums are available due to significant subsidization from employer
  • Employer premium subsidies not treated as taxable benefits for employee


Cons

  • Coverage discontinues after the enrollee discontinues work at the employer — Can exercise the COBRA option to continue coverage but it is very expensive
  • Health insurance choices limited to selection approved by employer
  • Small employers often subsidize health insurance at a lower level than large employers

 

Health Benefits Plans


Pros

  • Gives a member a cash payment upon a qualifying incident (e.g. accident or critical illness).
  • Affordable premiums
  • Some plans include additional wellness benefits such as telemedicine so members have access to doctor consultations via phone or online video chat 24/7 at no additional cost.
  • Applications for insurance can be made any time during the year
  • Prescription discounts often included
  • Plans offered on AgileHealthInsurance do not require medical underwriting so applications will not be rejected based on health status


Cons

  • No coverage of pre-existing medical conditions
  • Benefits are tied to specific incidences such as a hospital admission or doctor visit
  • No benefits for general illnesses such as diabetes or conditions such as pregnancy.
  • Capped medical expense coverage at a rate much lower than major medical plans
  • Enrollees still subject to Affordable Care Act Shared Responsibility Tax if they do not have Obamacare/Affordable Care Act compliant insurance

 

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What Is Short Term Health Insurance?

Short Term Health Insurance is major medical insurance that provides coverage for a defined period of time and generally has a much lower monthly premium than other forms of major medical health insurance. There are two other big advantages of Short Term Health Insurance over other forms of major medical insurance such as an Obamacare (ACA) plan or an employer-based plan. First, you can use your Short Term Health Insurance plan to pay for services from ANY doctor or hospital. Yes, you can keep your doctor! Second, Short Term Health Insurance plans have no open enrollment restrictions, so you can apply at anytime. You will be notified within minutes if your application is approved, and you can use your coverage as early as the next day! At AgileHealthInsurance, we specialize in affordable Short Term Health Insurance plans, and we are committed to offering consumers flexible choices.

Why Choose A Short Term Health Insurance Plan?
  1. Short Term Health Insurance plans can be far more affordable than an ACA plan even after you consider the tax penalty.

In particular, those who do not qualify Obamacare plan subsidies will be hit by especially high premiums. EXAMPLE: A 29 year old woman making $33,000 per year in South Florida would pay approximately $2,200 per year for a bronze-level Obamacare plan. For less than $500 per year she can purchase four Short Term plans back-to-back with a comparable deductible, pay the tax penalty of $695, and save over $1,000 per year.

  1. You can still get an ACA plan if you do develop a condition that prevents you from reapplying for a Short Term Health Insurance plan.

Affordable Care Act health plans cannot deny coverage for pre-existing conditions. If you do develop a health condition,you might not be eligible for a subsequent Short Term Health Insurance plan, but you can secure an ACA plan during Open Enrollment.

  1. Short Term Health Insurance is Flexible.

The ACA requires each ACA plan to include 10 essential health benefits. Maternity services is one of these benefits and is required to be covered by all Obamacare plans. As a simple example, a single male who buys an ACA plan will have maternity coverage that he’ll never need. In contrast, Short Term Health Insurance offers streamlined benefits–those that a healthy member is more likely to use–hospital, doctor, x-ray and other treatment benefits in case of illness or an accident.

  1. There is No Annual Open Enrollment Period.

If you are not enrolled in a plan before the Open Enrollment deadline, you won’t be able to purchase an Obamacare plan unless you meet certain special requirements. In contrast, you can enroll in a Short Term Health Insurance plan at any time.

The ACA Open Enrollment Period is the six weeks between November 1, 2017 and December 15, 2017.

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