Why Short Term Health Plans And Health Benefit Insurance Are Becoming Popular in 2017


July 21, 2017

Health Benefit Insurance & Short Term Health Insurance Plans – An Affordable Coverage Option For Some, Not All

One of the biggest gripes of both insurance carriers and insured people is that major medical health insurance coverage just costs too much. We have heard it a million times by now from frustrated Americans, if health insurance costs don’t come down, too many people will choose to be uninsured. At that point only the sick will have coverage and insurance carriers will leave the market because the market is flooded with too many people who are sick compared against people who are healthy. Only a few insurance carriers will remain and as a result prices will go up even higher, and  eventually the market will become unstable and then the only options left will be too expensive, and more people will choose to be uninsured making things worse.

It’s a vicious cycle, particularly under Obamacare where the only way to avoid a tax penalty is to have a major medical plan that complies with the law. Although we should note that the IRS technically speaking isn’t currently, or during this past tax season, actually enforcing the tax penalty. It was technically optional to provide proof whether or not you had health insurance for the full year.

One way around this last point is that someone (Congress) could come in and remove the individual mandate from the law, which would mean no more tax penalties for those who don’t get insurance. Another solution is to change what kind of plan complies with the law in the first place.

Health Benefit Insurance – Short Term Health Insurance – An Excellent Alternative To Obamacare For Individuals Without Pre-Existing Conditions

The fact remains though that people want health insurance and they want it to be affordable. If the market is too unstable right now to have affordable major medical options for Americans, what is the alternative? The alternative – for health people only – is to learn about short term health plans and how best to bundle them with supplemental, also known as ancillary, products to get fuller coverage. You can typically get these bundled plans for significantly less than what you would pay for an ACA complaint or Obamacare plan. The one major flaw in these type of plans and bundles, is that for individuals who have significant pre-existing conditions, you will not be eligible to enroll. These plans are also not a fit for anyone who is expecting, or planning on having a child soon. Maternity care, nor certain parts of hospitalization due to pregnancy may not be covered. As always, the devil is in the details, so you most definitely want to fully understand what it is you’re purchasing before making a commitment.

The concept of ancillary or supplemental insurance plans has been used for decades to bolster many employer group plans, but only recently has the individual market started to pay attention to the perks these types of plans offer.

Some examples of ancillary or supplemental plans are:

  • Fixed indemnity
  • Dental
  • Vision
  • Critical Illness Coverage
  • Accident Insurance
  • Life Insurance
  • Long-term Care Insurance
  • Health Benefit Insurance Plans
  • Gap Health Insurance Plan

Each of these plans act differently and do different things, and some in effect the same type of coverage, but simply being marketed under a different name. Health benefit insurance, or health benefit insurance plans, which are basically hospital indemnity plans, are one such example of an established product, essentially being rebranded as something new.  Fixed indemnity plan (hospital indemnity plan), critical illness and gap health insurance coverage, pay you a lump sum for different illnesses and medical situations so that you can pay the deductibles, coinsurance, copays and out-of-pocket expenses related to that medical event and imposed by your health insurance coverage.

Having these supplemental policies alone are not enough though. You need to also have some sort of fuller coverage health insurance policy. As we all know, a major medical Obamacare plan is oftentimes simply out of reach for many households, but if you’re healthy, meaning that you don’t have any pre-existing conditions and you are not pregnant or planning to get pregnant, bundling one or more of these supplemental or ancillary products with a short term health insurance plan year round may be the most affordable way to get full protection.

Could a short term health insurance plan work better for you?
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