People who have always had employer insurance (either as employee, spouse or dependent) or governmental insurance are often surprised to discover the world of individual health care. It is not easy to find suitable individual or family coverage. In Colorado, there are three types of individual coverage:
• Affordable Care Act compliant plans
• Indemnity Plans
• Health Sharing Plans
A fourth option—Short Term Major Medical Plans-- is no longer available in Colorado with the departure of the last insurance carrier from the state. Each of the coverage types has pluses and minuses.
Affordable Care Act (ACA) Plans
These plans provide coverage that complies with the ACA (aka Obamacare), which means:
• No pre-existing condition limitations
• No annual or lifetime benefit maximum
• Annual cap on your out of pocket expenses
In general, a person can only enroll in one of these plans during the annual Open Enrollment Period (Nov 1 – Dec 15 each year) for a Jan 1 start. However, you can qualify for a Special Enrollment Period if you experience one of the life change events.
Rates are generally higher than the share you pay with employer coverage. Tax credits make monthly payments more affordable and are available for individuals with annual income no greater than of $48,000; couples $65,000; and a family of four $100,000.
Comprehensive Medical Indemnity Plans
These plans provide a flat reimbursement for specified services. For example, if the reimbursement rate for a doctor visit is $100 and the visit actually costs $120, you pay the $20 difference. The most comprehensive of these covers a long list of medical procedures and services. Other plans cover only accidents, or diagnosis of a critical illness. Rates are better than ACA plans and plans typically offer a national network of doctors and hospitals.. The downside of these plans is that they exclude or limit coverage based on pre-existing conditions and the reimbursement amount may leave the customer a lot to pay for major medical claims.
Health Sharing Plans
Health sharing plans are an outgrowth of the practice of local churches to contribute to a fund for payment of the medical expenses of members. Over time, these became more popular and more formal. Health Sharing grew in popularity as an alternative to ACA coverage—particularly before the “no insurance penalty” was abolished. Some health sharing plans require church membership or adherence to a certain religion. Many of the plans, however, require only a very general statement of beliefs making them broadly available to non-Christians as well as persons who consider themselves spiritual, but not religious. These plans have exclude or limit coverage on some pre-existing conditions and have benefit maximums.