Difference Between Health Insurance and Health Share Plans
As the cost of health care continues to rise, many consumers are concerned about how they will be able to fit health insurance into their budgets. Due to the increasing costs, consumers are looking into alternatives. One option that tends to come up is a health share plan.
What exactly are health share plans? What can a health share plan offer you, and what do you need to know about these plans before you commit to one? As a California resident, you should understand the difference between health insurance and health share plans to make the best decision for you and your family.
What Is a Health Share Plan?
Health share plans are also referred to as health sharing ministries and health care sharing programs. A health share plan is not the same as a cheap health insurance program, nor is it a health care alternative. Instead, health share plans are cooperatives in which members agree to cover a portion of one another’s medical costs. These plans are often faith-based, and though they may sound similar to insurance, there are key practical and legal differences.
Because a health care sharing ministry is not the same as health insurance, the rules are different. There are no provider network requirements for health share plans, which means you can visit any doctor you choose. When you enroll in a health share plan, you will receive a membership card and you will give this card to your doctor for payment. If a doctor does not accept your health share plan, you can pay out-of-pocket and get reimbursed.
How Is It Different From Traditional Health Insurance?
Insurance is defined as a guarantee of compensation for specific losses, illness, damage or death in exchange for the payment of a premium. Under a health share plan, no guarantee of compensation exists.
Many states have passed laws that make health share plans exempt from regulations and laws that govern health insurance. These laws are established to protect consumers and determine the way benefits are paid and premiums are collected. Health share plans differ from insurance in the following ways:
- These plans can decide their own processes for money distribution to members who submit claims.
- Some health share plans allow members to give money directly to one another for medical bills.
- Many of these plans do not cover preventive care or wellness visits, so members pay for this care out of pocket.
- Health share plans are not required to cover anything and make their own rules about what they will and will not cover. This means there is no guaranteed payment of claims, and they are not legally mandated to do so.
- Some plans also do not cover vision or dental.
- Health share plans cannot be used with reimbursement plans or HSAs.
- These plans offer few legal protections to members.
- Many plans cap what they will pay out, which means even if your plan covers your treatment, it may stop paying when the costs for your treatment exceeds a specific dollar amount and leave you to cover the rest of the bill out of pocket.
If you have been scared away from health insurance because of your annual deductible, a health share plan may not be the solution you’re looking for. Most of these plans have what is known as an annual unshared amount, and it is essentially the same as a deductible. Other health insurance terms and their health share plan equivalents include:
- Premium: The health share plan equivalent for the term “premium” is “monthly share.”
- Explanation of Benefits: The health share plan equivalent for the term “Explanation of Benefits” is “Explanation of Sharing.”
- Claim: The health share plan equivalent for the term “claim” is “eligible event, illness or incident.”
Things to Know About Health Share Plans
Before you agree to participate in a health share plan, there are important aspects of these plans that you should understand:
- Lack of coverage for preexisting conditions: Many of these plans do not cover preexisting conditions. While state and federal laws mandate that insurance companies accept consumers with preexisting conditions, a health share plan is not subject to these same requirements. A consumer with a preexisting condition may not get coverage for this condition through a health share plan, or they may need to pay into the plan for a certain number of years before they can get coverage.
- Few legal protections: As a health share plan member, you do not have the legal protections that you do under health insurance. Because these plans are not subject to regulatory oversight, they do not need to abide by laws that govern policyholder treatment, regulations that monitor their financial health or laws that protect consumers in the event that an insurance provider has insufficient funds to pay obligations or does not live up to regulatory requirements.
- Lack of negotiated discounts: Consumers who have health insurance enjoy the advantage of negotiated discounts that place limitations on the costs of medical care. A health share plan has significantly fewer members, and thus, less bargaining power than insurance plans with hospitals and physicians. Because of this, these plans are less able to lower medical costs via negotiated discounts.
Finding the Best Health Insurance for You
For many California residents, health share plans are not the right option for funding their health care costs. These plans offer few protections and are not guaranteed to pay for your treatment or reimburse you for your out-of-pocket payments.
Instead, you can easily purchase individual health insurance through Health for California. You may want to purchase individual health insurance if:
- You do not have access to a group health care plan through your employer.
- You have health insurance that does not cover your dependents or spouse.
- You have health insurance, but your needs for benefits have changed.
- You have health insurance, but your premiums are too high.
- You are self-employed.
You can choose from a platinum, gold, silver, bronze or catastrophic plan. If you are unsure which plan is right for you, we can help you navigate your options.
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Our agents are always available to answer your questions and provide the service you need. If you are an uninsured California resident or you are looking to switch insurance providers, get a free health insurance quote or speak to one of our representatives at Health for California today.
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