Medical Cost Sharing Plans

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Medical Cost Sharing Plans

Most Americans agree that health care costs are spiraling out of control. The Affordable Care Act plan monthly premiums are continuing to rise with no end in sight. There is a real need for alternative health insurance choices. Once such alternative option is a Medical Cost Sharing Plan.

senior studying Medicare Advantage plans.

Medical cost sharing plans are one of the fastest-growing healthcare options in the nation. They are an effective and affordable option for a growing number of American families.

So What Are Medical Cost Sharing Plans?

Medical cost sharing plans, also referred to as healthcare sharing plans, healthcare sharing ministries, or faith based health plans, are designed to perform the same basic function that a traditional health insurance plan would: Provide a means to pay for the costs associated with unexpected medical bills.

Medical cost sharing plans participants are part of a network whose members all pay a monthly fee into the plan. The resulting fund is used to manage medical claims according to the company guidelines, and the plan style chosen by the member. Again, it looks and sounds very much like health insurance - but it's not - not in the legal sense anyway. Because medical cost sharing plans are not insurance plans, how the plans are structured can be entirely different than what is offered by plans within the Affordable Care Act umbrella. This distinction is often reflected in plan flexibility and monthly costs.

Interesting Fact: Medicare and Medicaid in America account for more than 1 of every 3 dollars spent on American health care, and 1 of every 4 dollars in the federal budget. What is astounding is the fact that the cost of Medicare is still growing. Currently, the cost is growing at more than twice the rate of inflation. This growth curve is expected to become even more dramatic as the baby boomers age.

Benefits Of Medical Cost Sharing Plans

Medical cost sharing plans can provide several benefits to you and your family. It's important to understand these benefits in order to make a informed decision about your family's healthcare plan.

Lower Monthly Payments

Let's start with the most significant advantage. For a variety of reasons, medical cost sharing plans monthly costs tend to be lower than the typical monthly premium of traditional health insurance plans.

Lower Deductibles

Medical cost sharing plans tend to offer plan choice that feature lower "deductibles" than those found in traditional health insurance plans. (FYI: Because cost sharing plans are not insurance plans, the term "deductible" is not used. Terms like "annual portion", or "shared cost responsibility" are used instead.)

No Enrollment Period

One reason why many families opt for medical cost sharing plans is because they offer any-time enrollment. This means that you don't need to wait for an open enrollment period to gain health insurance. Instead, individuals can simply sign up for the plan they wish and begin their coverage. So, in some cases consumers purchasing a medical cost sharing plan will receive quicker access to healthcare.

Also, many consumers like knowing that they will never have to worry about missing an open enrollment period. The convenience of simply choosing a plan and going with it has helped grow healthcare sharing plans into the phenomena they are today.

Good to know: Pay less for prescriptions. Go generic, for starters. In almost every case, generics are just as good as name brands and are much cheaper, says Catherine Tom-Revzon, a pharmacist at The Children's Hospital at Montefiore, in New York City. Second, compare costs since prices vary significantly from store to store. Your best bet may be a warehouse club like Costco or Sam's Club. (You don't even need to be a member.) Another option: If your plan has a mail order pharmacy, you might be able to get 90 days' worth of prescriptions mailed to you for two co-pays.
courtesy of Parents.com

Disadvantages

One big selling point of an ACA backed plan is you cannot be declined coverage due to health issues. Medical cost sharing plan companies can choose to decline coverage to any individual due to medical issues or history. Also, certain ACA plan benefits and protections are mandated by law. Some benefits, like maternity, for example, may be very important to you. Your faith-based plan may not offer it.

There are also lifetime maximum benefit limitations with most any faith-based health plan. ACA plans have no such limitation.

For these reasons, medical cost sharing plans are not the perfect alternative healthcare plan solution for everyone. Whether or not a cost sharing plan makes good sense, depends upon your medical and financial circumstance. Be certain to understand benefits and limitations thoroughly, before purchasing any faith-based , or traditional health insurance plan.

For more information on Faith-Based / medical cost sharing ministries, please contact us directly.

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