The cost of health insurance can be financially crippling for many families. Traditional health insurance plans have continued to increase in price for those who don’t qualify for subsidies. But what other options are out there for coverage? We’ll share some in this blog post!
As of 2022, the average cost of a traditional health insurance plan covering a family of four, before accounting for the Affordable Care Act subsidy, was more than $1,200 per month. That’s $14,400 per year.
Even many families who do qualify for a subsidy are still feeling the strain, between high out-of-pocket premiums, deductibles, coinsurance costs, and copays, leaving families struggling to afford necessary healthcare.
That’s why the health sharing alternative is soaring in popularity. Read more about how Traditional Insurance plan is different from Health Sharing.
Health sharing plans come with significantly lower monthly costs, compared to traditional ACA-style health insurance policies. This makes them an attractive alternative for families looking to save money – especially if they are in good health, with no significant pre-existing conditions.
Traditional Health Insurance vs. Health Sharing Plans at a Glance
| Traditional Health Insurance | Health Sharing Plans |
|---|---|
| High cost, but qualifies for subsidies | Lower cost, does not qualify for subsidies |
| Immediate coverage of pre-existing conditions, surgeries | Costs related to pre-existing conditions, surgeries may be subject to waiting periods |
| Secular | Many, but not all, are faith-based |
| Subject to regulation by state insurance commissioners | Not regulated by state insurance commissioners |
| Narrow care networks (HMOs and PPOs) | More freedom to see providers of your choice |
| Limited open enrollment periods | Enroll at any time |
Compare Pricing on the Best Insurance Plans Available
How is Health Sharing Different from Insurance?
One of the key differences between health sharing and traditional health insurance is the way healthcare costs are shared.
In a health sharing plan, members contribute a monthly share amount, which is used to cover the medical expenses of other members. This shared responsibility model can result in lower costs for members who do not require frequent healthcare services. However, it is important to note that health sharing plans are not insurance and do not guarantee coverage for all medical expenses.
Accounting for ACA Subsidies
Health sharing plans do not qualify for premium subsidies under the Affordable Care Act.
This means that if you switch to a health sharing plan, you may lose the financial assistance provided by the ACA.
Be sure to take any subsidies into account when considering switching to a health sharing plan.
How Much Can Health Sharing Save per Month?
Savings can vary depending on factors such as the size of your family, overall health condition, whether you receive an Obamacare subsidy due to your income, and how much healthcare you and your family consume.
Families who don’t receive an Affordable Care Act subsidy save the most: Health share plans routinely save around 40 to 50% compared to the cost of a traditional ACA-qualified health insurance policy purchased via the Marketplace.
The cost savings are so great that many families who receive a subsidy can still save money by switching to a health sharing plan.
Note: While health sharing plans generally have lower monthly costs, they may also come with certain limitations, such as restrictions on pre-existing conditions, surgeries for new members, or specific types of treatments.
For this reason, health sharing plans may not be a great match for people with pre-existing conditions.
Healthshare plans vary. It is important to review the details of each health sharing plan to understand the potential savings that can be achieved.
Click here for more details on how health sharing plans can save you hundreds of dollars every month.
Freedom to Choose Your Own Doctor
Health sharing plans typically allow members much more freedom to choose their own doctors, hospitals, and other providers compared to traditional health insurance HMOs and PPOs sold over the health insurance exchanges.
If healthcare freedom is important to you, and pre-existing conditions aren’t a factor for you, health sharing may be a good option.
Considerations for People with Pre-existing Conditions
Individuals with pre-existing conditions should carefully evaluate the limitations and coverage offered by health sharing plans.
While some health sharing plans do help share expenses for certain pre-existing conditions, they all have waiting periods or exclusions.
If you or a family member has a pre-existing condition that requires regular medical care, it is important to ensure that the health sharing plan you are considering will provide the sharing benefits necessary to protect you and your family against a potential financial catastrophe due to the high cost of health care.
For those with pre-existing conditions, it’s a good idea to work with an experienced, trained Personal Benefits Manager who knows all the major health sharing product offerings well, and who can help you find the best match for you.
Your PBM can save you hours of research time and stress. And consultations are always free.
Click here to set up your free appointment.
Conclusion
Switching from a traditional health insurance plan to a health sharing plan can offer cost savings for some families.
However, it is crucial to consider the potential limitations, such as restrictions on pre-existing conditions and coverage for specific treatments. Before making a decision, it’s a great idea to consult with an expert Personal Benefits Manager who can provide personalized guidance based on your unique needs and circumstances.
They can help you assess the costs, benefits, and potential risks associated with switching to a health sharing plan, ensuring that your decision is well-informed and aligned with your healthcare needs.
Schedule an appointment with a Personal Benefits Manager today to explore your options and make an educated choice for your family’s health coverage.
Here are some additional articles on healthsharing programs: How to Compare Health Sharing Program Benefits and Limitations: A Comprehensive Guide | Medical Cost-Sharing: A Viable and Attractive Alternative to Traditional Health Insurance | What Is Health Sharing?
Here are some additional pages related to this article: Healthshare Plans | Complete Guide to Direct Primary Care (DPC)
Compare Pricing on the Best HealthShare Plans Available
Frequently Asked Questions about Switching from Traditional Health Insurance Plan to a Health Sharing Plan
What is a health sharing plan?
A health sharing plan is a form of healthcare cost-sharing among a community of individuals who share similar beliefs and values. Members contribute a monthly share amount, which is used to cover the medical expenses of other members.
How is health sharing different from health insurance?
Health sharing plans operate on a shared responsibility model, where members contribute to a pool of funds to cover each other’s medical expenses. Unlike health insurance, health sharing plans do not guarantee coverage for all medical expenses.
Do health sharing plans offer coverage for pre-existing conditions?
Some health sharing plans do provide coverage for pre-existing conditions, but it’s important to carefully review the details of each plan as coverage and waiting periods may vary.
Can I save money by switching to a health sharing plan?
Health sharing plans often have lower monthly costs compared to traditional health insurance plans. However, the potential savings depend on factors such as your family size, health condition, and healthcare needs.
Do health sharing plans qualify for Affordable Care Act (ACA) subsidies?
No, health sharing plans do not qualify for ACA subsidies. If you switch from a subsidized health insurance plan to a health sharing plan, you may lose the financial assistance provided by the ACA.
Are there any restrictions on the type of healthcare services covered by health sharing plans?
Health sharing plans may have limitations on coverage for certain treatments or services. It is essential to review the plan details to ensure your specific healthcare needs are covered.
Can I choose my healthcare providers with a health sharing plan?
While some health sharing plans allow you to choose your healthcare provider, others may require you to use specific networks or negotiate discounts with providers directly.
Are prescription medications covered by health sharing plans?
Health sharing plans may provide coverage for prescription medications, but specific coverage and limitations can vary. It is crucial to check the plan details to ensure your needed medications are covered.
What happens if I need emergency medical care with a health sharing plan?
Health sharing plans typically cover emergency medical care. However, it is important to understand the process and reimbursement guidelines to ensure you receive the necessary coverage.
Do health sharing plans have deductibles and copayments?
Health sharing plans may have a similar concept called an Annual Unshared Amount (AUA) or Initial Unshared Amount (IUA), which functions similarly to a deductible. Copayments are not typically part of health sharing plans.
Can I maintain my health savings account (HSA) with a health sharing plan?
Health sharing plans do not qualify for HSA contributions. If you switch to a health sharing plan, you may need to explore alternative options for saving for healthcare expenses.
Can I change my mind and switch back to traditional health insurance?
It is generally possible to switch back to traditional health insurance, but it is important to assess eligibility and enrollment periods. Consider the impact on coverage and any waiting periods that may apply.
Open Enrollment for traditional health insurance runs from November 1st through January 15th in most states.
Outside of Open Enrollment, you will generally need to qualify for a Special Enrollment Period in order to switch back to traditional insurance from a health share plan.
What kind of support can I expect from a health sharing plan?
Health sharing plans may provide access to member support teams who can assist with questions regarding coverage, providers, and the claims reimbursement process.
Are health sharing plans regulated like traditional health insurance?
Health sharing plans are not subject to the same regulations as traditional health insurance plans. They are often exempt from state insurance laws and may have different rules regarding coverage and claim reimbursement.
Should I consult with an expert before switching to a health sharing plan?
Consulting with a Personal Benefits Manager or healthcare insurance expert is highly recommended. They can provide personalized guidance based on your unique needs and circumstances to help you make an informed decision about switching to a health sharing plan.
Click here to schedule a free consultation with a Personal Benefits Manager.
Wiley is President of HSA for America. He believes that consumers should have choice and price transparency, so they can make the best healthcare decisions for their needs. Read more about Wiley on his Bio page.