Non-Obamacare Health Insurance If You Don’t Qualify for a Subsidy — 3 Options
Obamacare subsidies, including premium tax credits and cost-sharing reductions, help individuals and families with low incomes to obtain health insurance.
But what about middle-income earners ‒ those that earn too much to qualify for help but who don’t make enough money to offset the costs of rising health insurance premiums and healthcare costs? If that’s you, then you’re feeling the “middle-class squeeze.”
The middle-class squeeze is the result of stagnant wages combined with rising costs of basic necessities, such as rent, health insurance and medical care. Over a long enough period of time it means downward mobility for many of us.
If this sounds like your situation it’s worth shopping around and even identifying non-Obamacare health insurance alternatives that could help stretch your healthcare dollars.
Let’s look at three options, below.
Get the best deal on your major medical health plan
It’s still good practice to carry major medical coverage and be in compliance with the ACA. Because you don’t qualify for health insurance assistance, it makes sense to comparison shop outside of HealthCare.gov and your state’s exchange for major medical insurance that complies with the Affordable Care Act’s individual mandate.
However, it’s not uncommon to find better prices off the federal exchange.
Three common sources for ACA-compliant health insurance plans sold in the private market include:
- Private, online health insurance exchanges (e.g., eHealthInsurance.com) that quote and sell plans from different companies. Learn more about how to shop for health insurance plans online.
- Carrier-specific websites like Healthedeals. Compare options now or learn more about finding a reputable carrier (health insurance company).
Going off-exchange may provide you with additional carrier, plan and network options. That’s great if you are not eligible for a subsidy and want to save money, prefer a certain carrier, or want to ensure you have access to a specific doctor or hospital.
But what if you’re still facing a plan with a high deductible in order to make the monthly premium payments work?
Supplemental insurance makes your high deductible affordable
The general rule of thumb when it comes to health plan costs is: low premium = higher deductible and vice versa.
It may seem contradictory to buy additional health plans when you feel financially strained, but that could be a solution.
Supplemental products known as medical gap insurance pay a “fixed-cash benefit” directly to you (usually in the form of a check or direct deposit).
You can then use those funds however you need to to help cover your expenses. That may mean paying off your major medical deductible or other out of pocket medical expenses like your co-insurance.
Or you could use the funds to replace lost income by covering your rent, groceries, and childcare. It’s your money; you choose how to use it
If a high-deductible major medical plan paired with medical gap doesn’t sound right for you, an alternative health insurance option may be a solution.
Non-Obamacare alternative health plan options
If you don’t have an ACA-compliant plan, are you prepared to pay fully out of pocket for unexpected healthcare? That could be anywhere from a $200 urgent care visit to tens of thousands of dollars for hospitalization and a surgery.
You may want to consider non-ACA-compliant benefits in the form of short-term medical and hospital plans. These relatively low-cost solutions provide benefits that can help reduce what you pay out of pocket toward medical bills, and they can be purchased anytime of year.
It is important to note that neither of these plans meet the ACA’s individual mandate for minimum essential coverage, so you would still be on the hook for the ACA tax penalty.
Who should consider short-term medical coverage?
Short-term medical (STM) is a temporary solution designed to help with larger medical claims resulting from injuries and unexpected illnesses.
STM benefits often include but are not limited to:
- Hospital room and board
- Emergency room treatment
- Surgical services
- Ambulance services
These plans can be a smart solution for those in relatively good health, as pre-existing conditions may not be covered.
STM premiums are often a fraction of major medical premiums. For example, at the end of 2016, a short-term policy cost approximately $124 a month compared with $393 a month for a major medical plan without subsidies.
Who should consider a hospital indemnity plan?
Hospital indemnity plans can help pay for out-of-pocket costs resulting from hospitalization, chemotherapy, surgery and critical illness.
- Generally provide benefits for smaller claims throughout the year, whereas STM provides benefits for larger claims for a limited time
- Pay fixed benefit amounts for covered medical care at a specific duration (e.g., per day, per week, per visit): For example, a plan may pay a $2,000 surgeon benefit per surgery and an inpatient hospital hospital confinement benefit of $1,000 per day
- Pay fixed benefit amounts, regardless of what your provider bills for medical services: For example, if your plan’s surgeon benefit is $2,000 per surgery and you receive a surgeon bill for $2,100, your benefit remains $2,000 and you will be responsible for paying the $100 balance.
- May be used along with STM or ACA-compliant plans but do not coordinate benefits with such plans
- Can be purchased at any time of year (there’s no open enrollment period)
- Are guaranteed issue, which means you can obtain coverage regardless of pre-existing conditions and health history
To see examples of inpatient and outpatient hospital plan benefits, read “What’s a Hospital Indemnity Plan?”.
Get the benefits of both STM and a hospital plan
When you want benefits for both large and small claims, you may want to consider a bundled health insurance product.
Fusion is one such product, and it is available through HealtheDeals.com. Fusion includes an STM plan and a CAP hospital plan.
Bundled products are available year-round and, in the event you obtain major medical coverage, you can keep the hospital indemnity portion of the plan and continue to use its benefits as supplemental insurance.
Next Steps — Pick One
We covered a lot of ground in this article, but if you’re feeling the middle class squeeze it boils down to three options to help curb healthcare expenses:
1. Shop around and obtain the most affordable ACA-compliant major medical coverage that you can.
Speak to an advisor today about major medical health insurance.
2. Supplement your high deductible major medical plan with additional coverage known as “medical gap” to help you pay off your deductible.
3. Utilize only non-Obamacare health insurance alternatives such as short term medical, hospital indemnity coverageor a bundled plan (Fusion) that includes both the high dollar coverage of STM and the guaranteed issue benefit of the hospital plan.
Still not sure how to proceed? Get the personalized advice of a knowledgeable insurance agent in your area. Use Agent Finder to search for local assistance.
First published October 31, 2016