Health insurance is expensive, and it only continues to become more so. Research from the Kaiser Family Foundation found that the average annual premium for an individual plan in 2018 was $619, up from $364 in 2014. And according to the same report, premiums are expected to continue rising by about 7% each year through 2022. If you’re trying to find affordable health care coverage that fits your needs, you might be considering a health insurance sharing plan. These plans are sometimes referred to as “collaborative healthcare” or “health share” plans because they involve several people financially and physically backing each other up when one of them needs help with medical bills. But what exactly are health insurance sharing plans? Let’s take a closer look at how these plans work and the pros and cons of joining one.
What Is a Health Insurance Sharing Plan?
Health insurance share plans online are an alternative to traditional health insurance. These types of insurance are also known as self-funded plans because they are set up and managed internally by the company. Unlike traditional insurance, these plans do not rely on an outside company to handle payment if someone makes a claim. Instead, a health insurance sharing plan relies on a network of people who financially back each other up when someone needs medical help. The way this works is that you join a network of people who are looking for financial assistance with medical bills. This network has several tiers of members, ranging from individuals with no income to groups of people working for the same employer.
How Does a Health Insurance Sharing Plan Work?
Let’s say that you’re the individual looking for financial help. You’re the top tier (or “gold”) member in your health insurance sharing plan, and you’re responsible for paying all of your own medical expenses. But if you ever need medical assistance, you can turn to the silver tier members in your network. Silver tier members usually have no income and have agreed that they will repay the cost of your medical care if you ever need assistance. Silver tier members can also turn to the bronze tier when they need help paying for medical bills. Bronze tier members are usually employed but are not offered health care coverage through their jobs. As a result, if you need assistance from the bronze tier, they can get help from the silver members.
The Benefits of a Health Insurance Sharing Plan
There are several benefits to joining a health insurance sharing plan. First, these plans are significantly cheaper than traditional health insurance. Depending on the plan, you may have to pay a small monthly fee. Health insurance sharing plans also allow you to choose your network of health care providers, unlike many health insurance plans, which give you very little choice in this area. Health insurance sharing plans also have a built-in incentive to stay healthy. If you’re a gold tier member, your monthly fee will increase if you visit the doctor too often or get too many lab tests. Finally, health insurance sharing plans are also different from traditional health insurance in that they encourage you to be financially responsible. In fact, if you don’t pay your monthly fees, you might be kicked out of the network.
The Cons of a Health Insurance Sharing Plan
Health insurance sharing plans may be significantly cheaper than traditional insurance, but that doesn’t mean that there aren’t any drawbacks. First, health insurance sharing plans rely heavily on your network of people. You could be vulnerable to exploitation depending on who you know and how generous they are. You also have no legal protection if you make a claim. Traditional health insurance gives you a contract and a set of guidelines that you can refer to if a claim is denied, but health insurance sharing plans do not.
Finally, health insurance sharing plans can be very risky. You’re obligated to pay if you become a silver tier member and someone makes a medical claim against you. If you never need medical assistance or are lucky enough to have a generous network, this might not be an issue. But health insurance sharing plans rely on the generosity of others, and you never know if you might be the one asking for help.
Who Should Join a Health Insurance Sharing Plan?
Health insurance sharing plans are an excellent option for people who want to save money on their health insurance and have a large personal network. Health insurance sharing plans also work well for people who don’t need much health care and don’t mind paying medical bills out of their own pockets. Because you are responsible for all of your medical expenses, you’ll have to be careful not to go to the doctor too often; otherwise, you’ll seriously increase your monthly fee. If you don’t mind foregoing legal protections and taking a risk, then you might be a good candidate for a health insurance sharing plan.
Health insurance sharing plans are significantly cheaper than traditional health insurance but can be risky. You have no legal protections if you make a claim and must rely heavily on your personal network, so you must be careful. Health insurance sharing plans are an excellent option for people who want to save money and have a large personal network. However, these plans are also risky and are not for everyone.