As the cost of traditional health insurance plans rises, some Americans are seeking alternatives that provide some sort of protection without busting their monthly budgets. There are a number of viable options.
- As the costs of traditional medical insurance increases, consumers seek alternatives to address their health coverage needs.
- Notable alternatives include primary care membership plans, medical cost-sharing programs, health savings accounts (HSA), medical services discount cards, and high-deductible policies.
- Primary care membership plans allow participants to receive care from a primary care physician for a flat fee, usually paid monthly.
- Medical-Cost Sharing programs allow participants to pool money to cover each other's medical expenses.
1) A Primary Care Membership
Some medical practices and independent primary care physicians offer services for a flat monthly fee, rather like a gym membership. An individual or family can get the usual services provided by a primary care physician, including virtually unlimited doctor visits, blood tests, and pediatric care, all with no co-pay. Of course, such an arrangement does not cover surgery, hospitalization, major injury treatment, or specialist care. Most who choose this option supplement primary care membership with high-deductible, relatively low-premium health insurance policies that cover catastrophic illnesses or injuries.
2) A Medical Cost-Sharing Program
Participants in programs such as Medi-Share pay monthly fees similar to insurance premiums. By pooling their resources, they share each others' medical costs as they arise. Each member who requires medical services pays an "incident fee," similar to a co-pay. The remainder of the medical costs is covered by the pooled fees.
These programs often negotiate discounts with primary care physicians and hospitals to keep costs down. The monthly fee is typically less than traditional health insurance while offering similar levels of reimbursement.
Many cost-sharing programs are from faith-based organizations that may exclude some services, such as abortion or birth control. Otherwise, the programs function much like a regular insurance policy at a lower overall cost.
3) A Health Savings Account
A health savings account (HSA) can help cover medical expenses while offering tax advantages. People who depend on this method usually combine it with a high-deductible insurance plan to cover catastrophic illnesses or injuries.
HSAs are available through many employers but may also be set up by individuals. Payments made into an HSA are pre-tax deductions, and there is no tax penalty for spending or withdrawing money as long as it is used to pay medical expenses.
The IRS limits maximum contributions to an HSA account. The annual limits in 2018 were $3,450 for an individual and $6,900 for a family.
4) A Medical Services Discount Card
For those who prefer to operate on a cash-only basis for medical costs, a variety of medical discount cards are available. Some discount cards can be used for physician or hospital services, prescriptions, or a combination of these. The discounts can be substantial, up to 80% or more.
Some cards come with a one-time membership fee, while some may have a small monthly fee. Others are available free.
There are typically restrictions on where the discount cards can be used, similar to those for a health care plan that requires using doctors within a specified network.
One notable advantage is that the cards can often be used for major dental services. The dental coverage in traditional health insurance policies is usually severely limited, expensive, or both.
Discount cards can also be used in combination with high-deductible catastrophic illness or injury insurance coverage.
5) A High-Deductible Policy
Younger adults in generally good health who do not expect to incur much in the way of medical costs during the year can often make do with a low-premium, high-deductible policy that covers only unexpected major injury or illness. The catastrophic health insurance policy ensures coverage in the event of such unforeseen medical expenses while keeping insurance costs to a minimum.