By Joshua Weinstein
Who doesn’t want to pay half for their health plan? What if it came with lower out-of-pocket costs if you were to get ill or injured? On top of that, you can use any provider of your choice! Too good to be true? Well, you know the saying. It probably is. Welcome to the world of alternative health plan arrangements.
Since passage of the Affordable Care Act (ACA) in 2010, health plans have changed. Categories of “Essential Health Benefits” were defined, and dollar-based maximums were prohibited. Denying coverage or claims because of pre-existing conditions was banned. Preventive care had to be covered “in full”, and the list of changes goes on. As a result of these mandates and consumer protections, rates, in general, rose. While most Americans receive their medical coverage through their employers, others get it through governmental plans, such as Medicare or Medicaid. Many are eligible for and receive subsidies to afford individual and family plans on the newly created Marketplaces, which sell Qualified Health Plans that meet these law’s requirements. However, some Americans fall through the gaps and don’t have access to affordable health coverage. Enter alternative plans.
Even prior to the ACA, health sharing plans existed. They are not health insurance, though. In these arrangements, members share each other’s health care costs. To cover these costs, members pay a monthly share amount (similar to paying a health insurance premium) and must pay for their own expenses up to a certain amount (similar to a deductible). After members pay their personal responsibilities, any remaining expenses are split between other members. Many health care cost-sharing arrangements offer different membership options to fit the needs of both individuals and families. Unlike the ACA compliant plans mentioned above, sharing plans are not subject to the law’s requirements. For example, they may deny membership to those who smoke, have a pre-existing condition or live a certain lifestyle. So, there’s lots of fine print to see what’s “shared” in the event of a covered illness or injury.
In the case of sharing plans, new entrants to the market have begun connecting sharing plans with limited supplement plans and they are being proposed to employers as ways to cover employees’ healthcare expenses for less money. Many are sponsored by associations of small businesses that were formed for the purpose of promoting and selling these arrangements. After reviewing a few of the designs, they don’t cover lengthy bouts with chronic conditions. For example, one only covers four months of medications and has a limited chemotherapy benefit. They usually do not provide preventive benefits, behavioral health, or rehabilitative therapies. What’s more is that the dreaded pre-existing condition exclusions and waiting periods are rampant throughout the plan documentation. They are marketing to look like traditional arrangements, and the Alaska Division of Insurance is actively investigating some of these programs for multiple reasons. Again, they are comprised of little, if any, insurance. That implies the companies sponsoring them have no fiscal requirements, regulations to follow, or other statutory appeal review obligations if a claim isn’t covered.
Other alternative health arrangements include short-term medical plans, “skinny plans”, mini-med plans, MEC plans, supplemental benefit plans, and more. There are ways to provide health benefits outside of the confines of the ACA, but the purchaser should be informed about what is or isn’t covered.
In closing, talking with a licensed health benefits consultant about your situation may yield surprising results. You may find that there are regulated, comprehensive insurance options in your reach. On the other hand, if ACA-regulated coverage isn’t an option for you, due to your budget, beliefs, or interests, I suggest diligence in checking the fine print and scouring the internet for reviews of how the specific alternative plans have performed for other purchasers. Going into one of these plans with reasonable expectations and “eyes wide open” is the best advice I can offer.