Unless you have a valid Special Election Period to get full coverage, you will end up paying the penalty for not having comprehensive coverage. Additionally, though you can add some layers of protection for your family and you. These layers of protection though are in no way as comprehensive as the traditional plans.
Some agents even push the limited benefit plans as an alternative to Obamacare, however they don’t provide full coverage and don’t satisfy the plan design requirements to avoid the annual penalty for not having adequate coverage. From a catastrophic illness or accident standpoint though, these limited benefit plans can help provide some cash to help cover the bills. It is worth looking at these plans in situations where otherwise there would be zero coverage as they do provide something.
The policies vary widely in depth of coverage, how they pay, and what they cover. No single one of these polices comes close to being comprehensive. They cover things such as expenses related to accidental injuries. Others cover cancer while some cover specific illnesses such as stroke or heart attack. There are some policies that cover a combination of the different situations mentioned above. When adding up all of the possible coverages the cost does get somewhat expensive.
Buying the mix of optional health plans can yield a decent net in which to fall, however for those with significant healthcare expenses, usually the totals paid under these polices will leave loads of expenses uncovered. Most folks don’t go bankrupt from a minor illness requiring a couple doctor office visits and some generic inexpensive medicine. What does bankrupt people is a case of cancer that is difficult to treat requiring experimental drugs and many doctor visits. The costs there add up quickly and are typically high per item needed, so combined it adds up to well beyond what most indemnity policy limits cover.
What you can get are the indemnity policies that depending on the structure will pay a set amount for an illness, or amounts that are based on specific care received. Either way they pay out a cash amount to the policy holder that can be used for any healthcare expenses. One issue to consider with these policies is the lack of networks and associated network discounts, which with traditional coverage can yield as much as 80% off of some providers’ charges. With the indemnity policies the amounts are paid regardless of charges and in addition to any other insurance, thus no coordination of benefits occurs. Also, they don’t get involved with the providers so all claims will be filed by the policy holder and any discounts arranged with the providers come from direct policyholder to provider negotiations, so sharpen your bargaining skills.
Lack of discounts, requirements that specific treatments or illnesses used as triggers for a payment, and limits on total amounts paid all make these policies great as add on for those with high deductible plans, but not the best idea in lieu of Obamacare plans. If however someone doesn’t have access to an Obamacare plan they will limit some the exposure should an accident or major illness occur. But, because these plans limit total payouts, the member could end up owing a lot of money anyhow. So at the earliest opportunity a full-fledged Obamacare plan should be procured. (That would be for January 1st purchased during the next open enrollment period.)
Please consider signing up for alerts when we publish new articles. It is as simple as clicking here.