You’re online looking for the cheapest health insurance you can find, but is that actually what you want? There’s cheap, as in affordable, and then there’s cheap – as in cheaply constructed. (Beware the latter.)
The Patient Protection and Affordable Care Act of 2010 (ACA) was designed to make affordable health insurance available to more people through income-based subsidies that reduce premiums and out-of-pocket healthcare costs.
Find out if you qualify for a subsidy and enroll in an ACA health plan during open enrollment or a qualifying special enrollment period.
If you don’t qualify for a subsidy, or missed the annual open enrollment period and need an affordable temporary insurance option, you may begin looking for lower-cost, non-ACA insurance.
This is where you’ll want to proceed with caution by reading policy details carefully and purchasing from a reputable source; otherwise, you could wind up paying for benefits that don’t come through when you need them.
To help you navigate the search for cheap medical benefits, we’ll look at ACA-compliant coverage as well as non-ACA coverage options, the basics of what they have to offer (or don’t), why you may select one type of product over another, and some factors to consider when making your decision.
Low-Cost Health Insurance – What it is, What it isn’t
When you seek health insurance coverage that is not considered minimum essential coverage under the ACA, you may find that products such as short term health insurance and hospital insurance have lower premiums than major medical insurance.
It’s important to understand why this might be the case:
Non-ACA health insurance products (e.g., short term health and hospital policies) tend to be low-cost because they are not required to adhere to the ACA; as such, they:
- Offer limited benefits – they do not include the ACA’s essential health benefits.
- Do not cover pre-existing conditions in most cases.
- Are not guaranteed issue – you could be denied coverage based on health history.
- May not be available in every state, as is the case for short-term health insurance.
With those facts in mind, here are some of the features of lower-cost, non-ACA health insurance:
- A range of benefits for potentially high-dollar, unexpected illnesses and injuries
- Temporary coverage for 30 to 364 days, depending on state limits
- On average, premiums are 31.5% less than major medical premiums—premium rates vary by plan and benefits selected
- The benefits are less because as described above, less coverage is offered
The best way to compare plans and costs is to get a quote. It just takes a minute.
- Fixed benefits for hospital, surgical and (sometimes) critical illness-related expenses
- Fixed-dollar reimbursements for covered medical expenses at certain durations
- Supplemental coverage to be used alongside major medical insurance (policies are considered separate and do not coordinate). In some states it is required that you have a major medical policy to enroll in a hospital indemnity policy.
Compare plans and costs available to you – it just takes a minute.
Short term and hospital insurance products are generally available year-round, which means you can apply outside of an ACA open or special enrollment period (those are the only times you can enroll in major medical policies).
What to Consider When Comparing Health Insurance
Now that we’ve discussed a few of the reasons some healthcare plans cost less than others, it’s time to talk about some factors that will inform what type of coverage you select.
Availability – Major medical health plans are available in all 50 states and D.C., but only during the annual open enrollment period (Nov-Dec) or a special enrollment period. Non-ACA health plans like short term medical and hospital indemnity insurance are generally available year-round but are regulated at the state level, so may be subject to certain state-level restrictions or may not be available at all.
Monthly premium – What will you pay out of pocket each month for coverage? Look at all plan types you are considering: ACA-compliant major medical as well as other options that are not ACA-compliant. That may include short term health insurance and hospital insurance.
Subsidy eligibility – If you qualify for a premium tax credit (or possibly a premium tax credit and cost-sharing reduction), then you’ll probably want to consider purchasing major medical insurance from HealthCare.gov or a state-based exchange (where you shop depends on your state).
Determine your subsidy eligibility.
If you don’t qualify for subsidies and want low-cost coverage that doesn’t include the ACA protections, you may consider shopping for short term health insurance and/or hospital insurance.
Benefits – What kind of medical care does each policy cover? How do non-ACA products compare with ACA-compliant coverage? What benefits do you need to in order to have adequate coverage for existing or anticipated medical expenses?
Learn about the essential health benefits that all ACA-qualifying major medical plans must include.
Pre-existing Conditions + Eligibility – Do you have pre-existing health conditions or ongoing medical needs? If so, you may want to consider major medical insurance because it is guaranteed issue – Non-ACA qualifying policies are not guaranteed issue and you can be denied coverage based on your pre-existing health conditions and health history. Going through the online application process for short term health insurance or hospital insurance is the best way to see if you qualify.
Out-of-pocket expenses – When it comes to the cost, monthly premium rates are only part of the picture. Whether you’re considering a major medical insurance plan or other coverage, you’ll want to pay attention to your financial responsibility should you use your benefits.
This could include, but is not limited to, deductibles; coinsurance, copays and maximum out-of-pocket amounts; prescription drug coverage; out-of-network rates and the full cost of any medical services or devices not covered by your policy.
Network restrictions – Many major medical policies include provider networks that require you to seek care from participating (i.e., in-network) providers; if you don’t, you may be subject to out-of-network rates for care.
Some short term and hospital plans are not subject to provider network restrictions. That means you can visit your preferred doctors, hospitals and clinics, though you may be subject to out-of-network costs.
Look at the whole picture when choosing a health insurance plan that you consider affordable; premium is only part of the equation. If you need help understanding and weighing your options, a licensed agent can help.
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How to Find Low-Cost Health Insurance
Again, what qualifies as low-cost health insurance is relative. What one person finds to be adequate coverage they consider to be “cheap,” could fall short in benefits and wind up being expensive for someone else.
With that in mind, here are some different types of health insurance and some ways you might find the most affordable option for you.
Major medical insurance – Determine whether or not you qualify for an ACA subsidy. You can estimate your subsidy with our calculator. Premium tax credits can reduce your monthly health insurance payments, depending on your household size and income.
Furthermore, if you purchase a silver plan and qualify for cost-sharing reductions, what you pay out of pocket will be less. Subsidies are only available through state and federal ACA exchanges.
Short term health insurance – Look for plans through websites such as the Health eDeals Marketplace. Short term coverage is not sold through ACA exchanges. Short term policies are typically customizable, allowing you to choose from several deductible and benefit options.
Find plans available to you and see how they vary based on coverage level.
Hospital insurance – You can also shop for hospital plans through websites such as the Health eDeals Marketplace. Again, these products are not sold through ACA exchanges. You can customize your coverage by selecting the level of benefits you prefer.
Obtain a hospital insurance quote by ZIP code within a few seconds, and then compare your options.
Summary + Next Steps
Ultimately, we all want to find an affordable health insurance policy that provides the medical benefits we need.
Monthly cost may be important, but it is not the only factor to consider when selecting a health insurance product – benefits offered, your portion of out-of-pocket expenses, network restrictions, and eligibility should all be considered.
Also, be sure to purchase coverage from a company you trust and learn about the benefits you select before you enroll. Read plan details and call your agent or the company’s customer service line to ask questions if you don’t understand what you’re buying.
Need help now? Call [phone_number] to speak with a licensed agent.