The United States Government has been presenting several schemes and plans to help the American residents enjoy health insurance benefits to the fullest. “Obamacare” is one such scheme that provides health insurance facilities for both the high-income and low-income groups in America. However, a report from a Washington D.C. firm, named Avalere Health, reveals that the price for one of the plans in Obamacare, called the silver plan, will rise to about 34% in 2018. The silver plan provides a decent coverage policy and is a bit high on the monthly premiums. For those who cannot afford to pay such high premiums; they need not worry, as there are policies besides this and a subsidy scheme, which will provide health insurance at low cost.
While shopping for cheap health insurance plans, one should have sound knowledge about health insurance policies. Senior Vice President of Advisor Services at Manning & Napier, Shelby George advises the shoppers to always look for how much coverage is provided for the costs a company provides. In other words, one should not get carried away by the cheap rates, but should rather focus on how much coverage the insurance companies are providing for those cheap rates they advertise.
In order to get best cheap health insurance, here is an explanation of the different policies available and a description of, whether one can get insurance for “free”.
Subsidies and other Health Insurance Plans:
With an aim to provide all Americans with Health Insurance coverage, one of the many useful plans proposed by the Government, is that of ‘subsidies’. A subsidy, in simple words, is the amount paid by the Government to the insurance companies to provide health insurance facilities to those with low incomes. This means that people falling into the low-income group will be able to enjoy health insurance benefits through the use of subsidies, which would otherwise be rejected by insurance companies on any other short-term policy claim.
An individual who earns about $48,000 and a family of 4, which earns somewhere less than $98,000 are those who can enjoy the benefits of subsidies. Hence, people with low incomes can enjoy good cheap health insurance with the help of subsidies. However, these subsidy schemes proposed by the Obamacare plan are more likely to be altered or eliminated on the whole by the Trump administration.
Talking about other health insurance plans, a silver plan will cover up to 70% of a person’s health care charges while a bronze plan will cover up to 60% of the costs and the remaining percentage of charges will have to be paid out of the person’s pockets. Now, comparing these two plans, if one wishes to spend absolutely NO money out of one’s pockets, then choosing a bronze plan along with a subsidy will be of great help. For those who cannot afford to pay out of one’s own pockets, the bronze plan coverage of 60% along with the remaining 40% covered by subsidies will help to enjoy cheap health insurance.
What Type of Policy One Can Choose?
The first step to get hold of the best cheap health insurance is to be aware of what policy suits one’s needs. Here is a list of two options explained briefly, so that one can choose the best fit.
1. Short-Term Policy: A short-term policy is for those people, who do not qualify to avail subsidies. In other words, people for whom it becomes ‘unaffordable’ to get health insurance are advised to choose this policy. Here the term ‘unaffordable’ is described as the cost that exceeds above 8% of an individual or a family’s annual income. According to, Nate Purpura, the Vice President of Consumer Affairs (ehealth.com), individuals whose income ranges from $49,000 to $69,000 and families that earn somewhere between $99,000 and $129,000, are supposed to go for short-term policies.
Hence, if one finds it difficult to pay expensive premiums and avail health insurance, then going for the short-term policy is highly recommended. However, there are no penalties if one doesn’t wish to have any health insurance. But, on a positive note, it is beneficial for the individuals themselves, if they have some financial protection that will be of benefit in unfriendly circumstances.
Here are a few noteworthy details about short-term policies:
- These policies usually last up to 3 months and can be extended till 9 months (in 3-month period renewal).
- According to the new rules proposed by President Trump, having a short-term policy will be mandatory for all individuals. However, this rule has not yet been passed, but will soon be in effect.
- These policies do not provide coverage for pre-existing illnesses, i.e. diseases that one is suffering from, before applying for the policy.
- If at all one wishes to include such pre-existing illnesses in the coverage plan, then the premiums will increase substantially.
- Unlike Obamacare schemes, short-term policies will not cover charges for maternal care, injuries due to abuse, and mental health treatment.
- On having a short-term policy, one can avail decent health care facilities at about $100 premium a month.
On an overall basis, despite the low coverage options it provides, those who are looking for cheap health insurance for individual or cheap health insurance for families, can avail great benefits from this policy.
2. Combined Policy or Combo of Policies:
Traditional policies or in other words plans with higher premiums will provide coverage for all the expensive hospital bills in case of risky illnesses or accidents. Whereas, choosing short-term plans will simply cover the normal doctor-visits. But if one wishes to avail the benefits of both the policies, i.e. get coverage for risky illnesses as well as for normal or routine sickness (like a cough, cold, fever), then insurance companies these days are offering combo packages.
In the recent past, people used to apply for both policies separately in order to avail coverage in both cases. This was getting difficult for the insurers to calculate different percentages and amounts; hence the plan for combo policies came up, allowing people to avail both benefits within a single policy. However, as evident as it seems, going for these policies will definitely cause one to pay premiums higher than usual.