Health benefit insurance plans, also known as limited benefit medical plans, indemnity plans, and fixed cash plans, are plans that provide a fixed benefit payment for covered services. They can offer a range of benefits to help meet you or your family’s needs. But do you have all the right information about this type of coverage before you enroll?
Familiarizing yourself with this type of coverage as a viable option may be a good idea for you and your loved ones, especially in the face of skyrocketing healthcare costs. It can help supplement your major medical coverage and can provide you access to options that may bring you the benefits and features you’ve been looking for.
Take a look below as we debunk common misconceptions about this level of coverage.
Misconception #1: Health benefit insurance plans work the same way as major medical or short-term medical insurance.
Health benefit insurance plans have some important differences from major medical policies. Understanding those differences will help you decide if this type of coverage is right for you.
These plans pay fixed indemnity benefits towards covered procedures as well as offer discounted rates for using in-network providers. There are no deductibles or copays with health benefit insurance plans, and they can provide another layer of financial protection if you need to supplement your major medical coverage. They are not a replacement for major medical insurance. Policies do have limitations, restrictions, and exclusions to consider.
This coverage provides the most benefit to those who are proactive about using in-network providers and taking advantage of the services and features provided. It can also offer guaranteed acceptance.
Misconception #2: Health benefit insurance plans don’t provide quality benefits and have a small network of doctors.
Health benefit insurance plans can often have lower premiums than major medical insurance since they are not providing comprehensive coverage. But they can also provide a host of valuable benefits to help you and your family with medical needs.
The core benefits of a limited benefit medical insurance plan can include fixed benefit payments for the following services:
- Emergency care*
- Doctor’s visits
- Diagnostics and labs
- Wellness care
*Typically not covered for pre-existing conditions
Fixed benefit health insurance plans can also come with a wide network of doctors nationwide. If the doctor you choose does not accept the insurance, you can pay upfront and submit your own claims for reimbursement, but you may be subject to higher out-of-pocket costs.
They may also provide supplementary non-insurance benefits to serve your needs in other areas of healthcare.
These may include:
- Prescription savings program on generic and brand-name medications
- Ability to speak to a licensed doctor over the phone or mobile app to diagnose common illnesses
- Patient advocacy service that can help you find procedures for the lowest cost and can negotiate medical bills
These benefits combine to create coverage designed to help you and your family with high medical costs or to supplement other insurance. When considering health benefit insurance plans, make sure to learn about all the features that can help you manage healthcare costs and save time.
Keep in mind that there are often exclusions with health benefit insurance plans that are important to look into before choosing a policy.
Exclusions may include:
- Pre-existing conditions (12-month waiting period)
- Prescription benefits
- Maternity benefits
If you have decided on this type of coverage, we provide access to key information to help make the most of your benefits. Your Member Portal access is secure, and you can access it anytime with the username and password sent in your welcome email. The portal will provide you access to a range of information such as your ID cards, claims status, and contact information for your carrier, claims administrator, and MyBenefitsKeeper.
Misconception #3: Hospital indemnity insurance plans are only beneficial for young people or as supplementary insurance.
Health benefit insurance plans can be beneficial for people of all ages with varying medical needs.
While these plans are designed to be supplementary to major medical policies, you can use them in a variety of circumstances.
This type of coverage may fit the needs of those who:
- Are priced out of major medical coverage, but seek a limited level of coverage for basic needs
- Want additional benefits to help cover deductibles and copays of a major medical policy
- Are seeking limited coverage until they are eligible for a major medical policy during Open Enrollment or through their employer
Making the decision about whether health benefit insurance coverage is right for you can be challenging, so talk to your agent about the specific benefits, conditions, and exclusions of any policies.
Note: Health benefit insurance plans are not intended to be a replacement or alternative to ACA or other major medical plans nor does it provide the minimum essential health benefits that are required, and it won’t help to avoid the fee for not carrying health insurance. These plans can have exclusions and limitations, which may not make them a valid option for some.
Misconception #4: Health benefit insurance plans can satisfy ACA requirements.
Fixed benefit insurance plans do not meet the minimum essential coverage required under the Affordable Care Act, so you would likely be subject to a tax penalty. Because they do not have to follow the guidelines for the ACA, premiums tend to be lower as more limited and/or restricted benefits are being offered. Still, these plans can be useful solutions for some who may need to supplement a high-deductible plan or who may otherwise go uninsured.
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“The Rising Cost of Health Care by Year and Its Causes.” The Balance. https://www.thebalance.com/causes-of-rising-healthcare-costs-4064878