6 Alternatives To Health Insurance

By Mark P. Cussen, CFP®, CMFC, AFC | February 26, 2010 AAA
6 Alternatives To Health Insurance

Millions of Americans face life on a daily basis without any health insurance. The rising cost of healthcare has effectively forced a growing number of individuals, families and businesses to face life without health coverage of any kind. For some, this is a risk that does not interfere with their everyday lives, but for others, the absence of health coverage can be a crushing burden. However, there is a growing segment of providers of alternatives to traditional health coverage that provide various levels of protection in specific areas, such as drug or hospital costs. Here are some of the ways that you can save on health costs.

  1. Medical Sharing Program
    This type of pooled program requires members to make monthly payments toward future medical costs of all other covered members and their dependents. The dollar amount of the monthly payment is subject to constant change, and there may also be an initial membership fee, as well as an annual deductible. Of course, members receive a measure of coverage for their own expenses in return. (Learn more in Steering Clear Of Medical Debt.)

  2. Discount Membership Program
    This provides preset discounts with a specific network of healthcare providers for all types of standard services. These can include medical, vision, dental, chiropractic, pediatric, drugs and medical supplies. Even child care, nursing home care and hearing aid devices may be discounted. This type of plan usually doesn't have a deductible or any restrictions on pre-existing conditions. Many times, the discount provider will provide the member with a card that is presented to providers. One thing to remember is that these programs are not insurance plans, you are responsible for paying for the services yourself. (Learn more in Get Sale Prices On Healthcare With Discount Plans.)

  3. Health Savings Accounts
    Although these plans technically do use a health insurance policy, the policy is a Qualified High-Deductible Policy that is designed to primarily cover catastrophic expenses. The other part of these plans consists of savings accounts for which are funded by deductible contributions, similar to an IRA. The money inside the account is invested in growth or income securities or cash. All money withdrawn from the plan is tax-free, provided it is used for qualified medical expenses-and the definition for this is very broad. It can be used for virtually any legitimate medical expense or procedure, including doctor's visits, surgery, long-term care, prescription and OTC drugs, vision, walking and hearing aids, and even acupuncture and alternative medicines in some cases. The deductible is a few thousand dollars per year, but taxpayers are able to pay for all of their out-of-pocket expenses on a pretax basis.

  4. State-Sponsored Medical Assistance Programs
    These programs are sponsored by each state to help low-income residents pay their medical bills. New York has a website known as HITE (The Health Information Tool for Empowerment) that assists those with little or no health coverage in finding discounted care or programs designed for uninsured residents. Every state has its own unique set of resources and programs designed to aid low-income residents. Use an internet search engine to find more information on the programs available in your state.

  5. Free Health Clinics
    These are available in every state in the union. These clinics provide rudimentary care for low-income residents and those without health insurance at little or no cost, or perhaps a donation. Some of these clinics only serve homeless people and others are reserved for HIV-Positive patients. But there are some that can provide simple services for a very low fee for middle-class residents as well. An internet search will yield a list of the free clinics available in your area.

  6. Medicaid
    If all else fails, this joint federal-state sponsored program provides assistance for some low-income taxpayers who qualify for aid. Eligible recipients must fall below certain income, asset and resource thresholds in order to receive aid. This program can help pay for doctor and hospital bills, nursing home care and other medical expenses. For more information on Medicaid, visit the Medicare website at http://www.medicare.gov/ and type Medicaid into the search bar. (Learn more about affordable healthcare in Failing Health Could Drain Your Retirement Savings.)

    Some large retailers also sponsor clinics that provide low-level care, and many hospitals also offer financial aid programs. Those with higher disposable incomes who cannot qualify for health coverage or would have to pay exorbitant premiums should consider self-insuring. Unreimbursed medical expenses can also be deductible above a certain threshold for taxpayers who can itemize deductions.

Bottom Line
These are just some of the possible alternatives to health insurance. Not all of these solutions will apply for every reader, but it is important to know that not having health insurance does not necessarily put basic health care out of reach.

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