In a world where affordability and ease of use are at the forefront of decision making, health insurance alternatives are keeping pace with disrupting societal norms.
Over the years, health insurance has become increasingly more expensive and less ideal for the ever-evolving population. Even with the Affordable Care Act’s Obamacare-only Marketplace, millions of Americans are either uninsured or underinsured.
According to an article on PolicyAdvice.net, “The uninsured rate in the country in 2019 ticked up to 10.9% from 10.4% the previous year. It has been found that health insurance is not owned by around 44 million adults in the US, while 38 million do not have adequate health coverage.”
Recently PETERSON-KFF Health System Tracker reported, “In 2020, administrative expenses – which include the cost of administering private insurance plans and public coverage programs but not the administrative costs of health providers – represented 8.5% of total national health expenditures, up from about 3.5% in 1970, and 7.6% in 2019.”
Enter, Health Insurance Alternatives
So, with insurance costs on the rise and the number of insured individuals on the decline, where can people turn when they can’t afford or don’t qualify for coverage?
No matter if you’re a freelancer, in between jobs, traditionally employed, or a small business owner looking to provide some benefits to your team, it may be time to explore some powerful health insurance alternatives.
The best alternative to traditional health insurance is ultimately going to depend on your personal situation, but today we’re going to be taking a look at Subscription-Based Healthcare, Medical Cost Sharing Plans, and High-Deductible Health Plans (HDHPs) combined with Health Savings Accounts (HSAs).
There are, of course, several other health insurance alternatives like private, non-marketplace and temporary health insurance plans available, but for the sake of this article, we’ll be focusing on affordable alternatives that deviate from traditional health insurance models.
1. Subscription-Based Healthcare
The rapid growth and advancement in technology has revamped the way we view everything, including healthcare. With cost and quality of care at the front of mind, subscription-based healthcare models are picking up steam as an excellent health insurance alternative.
What is subscription-based healthcare?
The subscription business model means offering a high-quality bundle of products and services at an attractive price. When people think of traditional health insurance, “in-network” and “out-of-network” are terms that often come to mind. With subscription-based healthcare, think of your subscription bundle as your “in-network” care.
Each subscription-based healthcare company does it a little differently, but 180 Healthcare has partnered with dentists, optometrists, dermatologists, fitness facilities, primary care physicians, telehealth providers, labs and imaging, mental health providers, elderly care providers, physical therapy, and more. This group of partners are called affiliates and each offers pre-determined benefits to subscribers.
This affiliate model is the reason we’ve put subscription-based healthcare at the top of our list of health insurance alternatives—it offers a huge network of healthcare providers, creating easy access for every subscriber.
How much does subscription-based healthcare cost?
Traditional health insurance can be costly for individuals, families, and employers. In 2020, the average national cost for health insurance was $456 for an individual and $1,152 for a family per month. In comparison, subscription-based healthcare plans are a significantly lower investment. For example, 180 Healthcare’s Primary Plan is $79/month and includes unlimited, 24/7 doctor visits with no copay or deductible, significant discounts on prescriptions, discounted labs and imaging, and discounted dental, vision, chiropractic, and physical therapy services.
For $10 more per month, subscribers can add 24/7 gym access. Do you have children? Not to worry—each child can also be added to the plan for $10/month.
So, for a family of four on the primary plan, you would only pay $178/month, a $974 savings as compared to the national averages for a traditional family health insurance plan.
Who is subscription-based healthcare for?
Subscription-based healthcare is extremely flexible, and due to its affordability, it’s a great fit for nearly everyone. Whether you’re a family of four who simply can’t afford the high costs of traditional plans, a newly self-employed freelancer on a startup budget, or a small business owner looking to provide incredible benefits to your employees, subscription-based healthcare is an option.
In most cases, there are no pre-qualifiers or approvals required to sign up, making it a fit for anyone looking for affordable access to healthcare.
Where can I find subscription-based healthcare?
Subscription-based healthcare comes in many different forms: direct primary care, concierge medicine, membership medicine, and more. Start with an online search near you for providers, or contact 180 Healthcare and check on coverage in your area.
2. Medical Cost Sharing Plans
At 180 Healthcare, we’re particularly excited about this health insurance alternative as it’s one we offer our clients through our partnership with Sedera. Medical Cost Sharing is peer-to-peer sharing of large, unexpected medical costs through a membership-based Community. What does that mean? Let’s take a closer look, shall we?
What are medical cost sharing plans?
Typically, when you join a medical cost sharing plan, you choose a membership level based on the amount you want to pay without help from the community. Think of this like you would a traditional insurance plan’s deductible and it’s called your annual or initial unshareable amount (IUA). These funds go towards covering your own expenses.
Then, once you’ve selected your IUA, you begin contributing funds for use by other members on a monthly basis. Think of this like you would a traditional “premium”. If something unexpected happens, community members share funds to help pay for any expenses beyond your IUA. Like a deductible, you must use your IUA before using funds provided by the community.
Using those shared funds, you then pay your healthcare provider the “cash price” for the care. Remember, medical cost sharing plans aren’t insurance, but some plans do count as insurance under the Affordable Care Act (ACA)—just be sure the plan you’re subscribing to is ACA compliant. That means more affordable healthcare benefits while avoiding the tax penalty for going uninsured, making these plans an incredible health insurance alternative.
How much do medical cost sharing plans cost?
As with most things, the cost depends on your unique situation. Remember, medical sharing plans start with your IUA. The initial unshared amount is usually $1,500 and costs around $300-$500/mo for individual members, $600-$1,000/mo for couples, and anywhere between $900 and $5,000 for families. However, it varies per plan and from company to company.
With 180 Healthcare, monthly membership fees can range from approximately $106 to $523, depending on your plan details, coverage, and direct primary care. Beyond the IUA and the monthly membership fees, medical expenses are shared among members of the community.
Who are medical cost sharing plans for?
Like subscription-based healthcare, medical sharing plans are great for a wide range of people:
- Those who are in generally good health
- People who lack traditional health insurance through employer or government programs
- Folks who missed open enrollment for the current year or cannot afford health insurance premiums
- Individuals and families who only want or need catastrophic coverage
- Freelancers, self-employed individuals, or small business owners looking to provide more affordable benefits for themselves or their employees.
In most cases, there are no pre-qualifiers or approvals required to sign up, but it is worth noting that many medical cost sharing organizations are religious-based. This doesn’t mean you have to disclose or declare your faith to join, but most organizations ask members to agree to live a moral and healthy lifestyle. In most cases, this means no drugs, alcohol, or tobacco use.
Sedera, for example, has no alcohol limitations but does charge an additional $75/mo for tobacco users. Be sure to check with the company of your choice for their restrictions and additional fees.
Where can I find medical cost sharing plans?
At 180 Healthcare, we recommend starting with Sedera. You can find their membership information and cost calculator on their website. At 180, we can provide discounted membership to Sedera when you sign up for one of our subscription health plans.
3. High-Deductible Health Plans (HDHPs) + Health Savings Accounts (HSAs)
Last on our list of health insurance alternatives is High-deductible health plans (HDHPs) which can be a great option for healthy individuals who are looking to lower their monthly costs or to find coverage between traditional health insurance plans. Combined with a health savings account, this can be a powerful duo.
What are HDHPs and HSAs?
High Deductible Health Plans (HDHPs) are plans that have a relatively low monthly premium but higher-than-normal deductibles. For example, with an HDHP, if you have a deductible of $8,000 and receive a $15,000 hospital bill, you’ll have to pay the full $8,000 out-of-pocket before your HDHP helps to cover the rest.
HDHPs are usually sold with health savings accounts, or HSAs. HSAs are incredible because they allow you to save pre-tax dollars which you can use later to cover qualified medical expenses.
The drawback to HSAs? A large medical expense can quickly drain your savings, which is why they’re often coupled with HDHPs. The upside is that you can use your HSA to cover a lot of everyday medical expenses, such as:
- Blood pressure monitors
- Breast pumps and lactation supplies
- Chiropractic care
- Contact lenses and saline solution
- Eye exams
- Eye surgery, including laser surgery
- Eyeglasses, including prescription and reading glasses, and prescription sunglasses
- Flu shots
- Hearing aids and batteries
- Lab fees
- Physical exams
- Physical therapy
- Prescription medications
- Psychiatrist care
- Psychologist care
- And so, so much more!
Funds deposited into an HSA are not taxed, the balance in the HSA and interest grows tax free, and that amount is available on a tax free basis to pay your qualified medical expenses, including your copays, coinsurance and deductible.
For more information on health savings accounts and what they cover, check out HSA-Eligible Expenses in 2021 and 2022 on The Motley Fool.
How much do HDHPs and HSAs cost?
According to HealthCare.gov, “For 2022, the IRS defines a high deductible health plan as any plan with a deductible of at least $1,400 for an individual or $2,800 for a family. An HDHP’s total yearly out-of-pocket expenses (including deductibles, copayments, and coinsurance) can’t be more than $7,050 for an individual or $14,100 for a family.”
Once you qualify for an HSA by signing up for a HDHP, you can contribute up to $3,650 for an individual or up to $7,300 for a family.
However, contribution limits are set based on the eligible months within a calendar year, meaning allowable contributions are prorated by the number of months an individual is eligible to contribute to an HSA.
So, if you’re starting an HSA with only 5 eligible months left in the year, you could contribute up to $1,520 ($3,650 ÷ 12 × 7) for that year.
Who are HDHPs and HSAs for?
High Deductible Health Plans are best for folks who are in relatively good health and rarely get sick or visit a doctor. This is primarily due to the high deductible. You might think of an HDHP as catastrophic coverage, where the high deductible might pale in comparison to the unexpected medical expenses.
HSAs are great for individuals or families who want to save pre-tax dollars to cover future out-of-pocket medical expenses. However, not everyone qualifies. Here are a few eligibility requirements to consider:
- Enrolled in an HDHP and not covered by another health plan.
- Not enrolled in Medicare.
- Not in receipt of VA or Indian Health Service (IHS) medical benefits within the last three
- Not covered by your own or your spouse’s flexible spending account (FSA), and are not claimed as a dependent on someone else’s tax return.
If you’re still a little skeptical about other health insurance alternatives such as subscription-based healthcare or medical cost sharing plans, a High Deductible Health Plan/Health Savings Account combo might just be the perfect fit for you and your loved ones.
Where do I go from here?
If you’re still unsure of which option might be best for you, seek professional guidance from your financial advisor, or ask a friend or family member who might be able to lend their perspective or help weigh options.
Or, if you want to talk to an expert in the non-health insurance industry, contact our team here at 180 Healthcare. If we can’t provide the help you need, we’ll do our best to point you in the right direction.
Cheers! Stay safe, stay well.