Three Alternatives to Traditional Health Insurance

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female doctor comforting middle aged patient

Getting traditional health insurance can be very expensive and it’s understandable why people would look for other alternatives when it comes to this. Luckily, there are a few alternatives out there that are as great as the traditional health insurance.

Traditional health insurance provides coverage for doctor visits, hospitalization, surgery, and other medical expenses. It’s a fee-for-service plan that can be paid each month. It can easily be expensive, depending on the coverage, but if you’re someone who is looking for such alternatives, keep on reading as we have three of these that could be something you are looking for.

  • Payment arrangement made with medical providers or direct primary care

DPC Healthcare is a type of primary care billing and payment arrangements made between patients and medical providers. This means that sending claims to insurance providers is not needed to be covered when it comes to gaining access to numerous doctors or physicians.

This is a cheaper alternative because this type of agreement has no copays or deductibles, and so patients just spend less on this. What’s even better is that it promises quality care as patients with this agreement no longer have to deal with the burdensome procedures and restrictions that insurance providers have.

These restrictions and conditions usually would cause problems for many consumers. Their claims can be invalid if physicians talk about this with their patients via text or phones. With traditional health insurance, patients will also have to wait for a referral from a specialist before some procedures are covered. This is something that DPC agreements don’t have. It’s simply cheaper and less of a hassle to have.

  • Medical cost-sharing programs

Medical sharing networks are not insurance companies even if their concept is a bit similar to a health insurance provider. This alternative way to be covered is different because this plan or programs ensures that a large number of people are insured.

It sounds exactly what it is. People who have varying pre-existing conditions and lifestyles can be covered with just one plan. This is why they will be sharing the medical costs.

What you should also know that medical sharing providers are non-profit and charitable organizations. They collect funds from the members and when the time comes that a member needs help with medical expenses, this is where the organization comes in.

No contract is necessary to be part of this. Such organizations are also not forced to take in people with pre-existing conditions. It’s voluntary and as long as you get to pay your share or the so-called share amount or family share, then you get the right to be covered.

There are a few advantages of using this as being given the opportunity to negotiate medical costs. This can be done by allowing participants or patients to pay in cash and doing so can lessen a medical bill. People under a sharing plan are also not limited when it comes to health provider networks. Patients can choose any of their preferred and/or required medical services. This means that patients can get consults or treatments from anywhere in the state or even outside the country.

  • Have a health savings account

Another option that you have is to open a health savings account or HSA. Having a health savings account can help cover your medical expenses with tax advantages. This can be combined with another healthcare plan, particularly with a high-deductible health plan if you want to be covered for catastrophic illnesses or injuries.

You can open a health savings account as an individual and this is also available through many employers. When it comes to paying for this, payments are taken as pre-tax deductions. There is also no tax penalty on withdrawing money from this account as long as it is used to pay for medical expenses.

There is a limit, however, when it comes to the maximum contribution under the IRS. For this year, 2020, contributions can go up to 3,550 US dollars for individual coverage. Family coverage has a limit of 7,100 US dollars. For the elderly or people aged 55 and above, an extra 1,000 US dollars a year can be accepted.

It’s best to open such an account with a bank your trust or are comfortable with. Each bank would offer something differently so this is also something that you can shop around. If you already have other health plans, then you can also consult your provider regarding this.

Typically, there will be terms and conditions so make sure that these are discussed properly. There are instances wherein you can only withdraw money after 65 non-medical expenses. You should also check the penalties imposed on expenses that are non-qualified lie cosmetic surgeries or health club membership.

Overall, these are just three alternatives that could either help you save money on health insurance or help you have better coverage when it comes to medical expenses. Always consider the budget that you have to determine what would work best for you.

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