Q: My workplace doesn’t offer health coverage and I’m not eligible for Medicaid. Marketplace plans aren’t affordable, either, so I’d like to find a new plan during Open Enrollment. What are my options for health care coverage?
A: The cost of health care coverage has skyrocketed over the last decade, and even more so in the last few years. With prices spiking on just about everything now, many Americans are finding it challenging to identify a decent health insurance plan they can afford.
Fortunately, there are ways to save on health care costs so you can have adequate coverage without feeling the pinch in your wallet. There are also several types of unconventional plans that may offer what you need at an affordable price.
Open Enrollment 2022 starts Monday, Nov. 1 and ends on Jan. 15, 2022. In light of Open Enrollment season, let’s take a look at some unconventional health care coverage options.
Health Savings Account (HSA)
While an HSA is not a replacement for health care coverage, it can help make pricey plans affordable. An HSA is a type of savings account that allows the account holder to set aside money on a pre-tax basis to pay for qualified medical expenses, such as deductibles, copayments, coinsurance and more. By using pre-tax money, the account holder can significantly lower their health care costs.
It’s important to note, though, that HSA funds can generally not be used to pay premiums. In addition, account holders can only make contributions to an HSA if they have a High Deductible Health Plan (HDHP) that only covers preventive services before the deductible. For plan year 2022, the minimum deductible for an HDHP is $1,400 for an individual and $2,800 for a family.
There are also limits on the contributions an account holder can make to an HSA each calendar year. In 2022, you can contribute up to $3,650 for individual coverage, and up to $7,300 for family coverage to an HSA. The good news is, HSA funds roll over from year to year if they aren’t spent, and may receive tax-free earnings, as well.
[If you think you may be eligible for an HSA, contact Advantage One Credit Union today to get started.]
Health share plans
A health share plan is structured similarly to a credit union. Instead of a CEO sitting on top of a wealthy corporation, the program is run by a not-for-profit religious organization and is jointly owned by members who share expenses for their collective medical needs. Most people opt to join a health share program because of the significant savings potential: It’s possible for a family of four to find a health share plan for just a few hundred dollars a month.
It’s important to note that most health share plans will not cover procedures or medications that do not align with their religious beliefs, such as abortions and/or birth control pills. Also, while premiums may be affordable, deductibles can be quite high. Finally, many health share plans only provide coverage after the cooperative “shares” the cost of a member’s medical bill or medication. This means, a health share member will need to lay out the money for medical costs until they are reimbursed by the plan.
Catastrophic health insurance
For healthy young adults who don’t see a doctor often, don’t take any ongoing medications and only want coverage in case of a medical emergency, a catastrophic health plan can be an affordable way to get coverage. These plans feature inexpensive monthly premiums, but very high deductibles. Policyholders must cover all their own health care costs until they meet the deductible, which can be close to $10,000.
Catastrophic health plans are only available to people under age 30, or older adults who qualify for an ACA hardship exemption. It’s also important to note that any health insurance subsidy an individual is eligible for cannot be used toward the cost of a catastrophic health plan.
Temporary health insurance
These short-term plans offer benefits for unexpected illnesses and injuries. However, they don’t cover any preventative care, maternity care or prescription drugs. Temporary health insurance is only available to individuals who are in good health and have no pre-existing conditions. The plans can last up to 12 months, and are not renewable. These plans can be beneficial for individuals who are “between insurance plans” and need temporary coverage.
Health care doesn’t come cheap, but there are out-of-the-box solutions that can make health insurance affordable.
Your Turn: Have you decided to go the unconventional route with health care coverage? Tell us about it in the comments.