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The Pros & Cons of Different Types of Health Insurance

The Pros & Cons of Different Types of Health Insurance

You have choices when it comes to health insurance. There are a 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.

Short Term Health Insurance

  • 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
  • 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)

  • 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
  • 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

  • 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
  • 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

  • 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
  • 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

Short Term Health Insurance is health insurance outside of the Affordable Care Act ("Obamacare"). Health Benefit Insurance is comprised of fixed indemnity and may include supplemental insurance products and non insurance supplementary health products/services; it is not major medical insurance. Neither Short Term Health Insurance nor Health Benefit Insurance cover pre-existing conditions, they do not include all ten of the minimum essential benefits of Obamacare, and you may be subject to the Affordable Care Act Uninsured Tax (The 2017 Congressional Tax Reform Act does not eliminate this tax until 2019). You can learn more here.