When it comes to healthcare expenses, most Americans have little to no choice when it comes to coverage. The Affordable Care Act has made things better for some, but not everyone. As a result, most affordable healthcare plans still require you to pay a lot out of pocket before the benefits kick in. Medical cost sharing is one type of plan that helps you pay your bills when they come. It’s also an out-of-pocket plan, which means it works as an additional expense beyond your premiums and standard deductibles. Fortunately, there are several different types of medical cost-sharing plans that can help those on a tight budget get the healthcare they need without going broke in the process. Here are our top five options:
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Health Reimbursement Arrangement (HRA)
An HRA is one of the simplest types of top medical cost sharing plans. Essentially, it’s a reimbursement system where employers share the cost of your medical expenses with you. You’re responsible for paying your bills in full, but you’ll be reimbursed by the company later on. HRA plans are typically limited to small businesses with less than 50 employees. They’re also designed for lower-income people who often have trouble paying medical bills.
Depending on the type of coverage chosen, an HRA can help pay for services as diverse as routine visits to specialists, diagnostic tests, surgeries, prescriptions, and more. One of the biggest benefits of an HRA is how little paperwork is involved. In many cases, you can use online tools to submit bills online. This makes it easy to manage your bills and ensures you don’t miss a payment. And because of all these reasons, HRA comes in the list of top medical cost sharing plans.
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Health Savings Accounts (HSA)
One of the most popular medical cost-sharing plans, an HSA, is a type of account used to pay for medical expenses. You make contributions to the account before taxes and then use the funds to pay for medical bills. They’re usually paired with high-deductible health plans (HDHPs), which have high premiums but offer the most savings for lower-income people. HSAs work best for people who can save at least $1,000 a year. They’re also best for people who are healthy and don’t expect to make many visits to the doctor. If you get sick a lot or have ongoing health issues, an HSA may not be the best choice for you. Most HSA plans require a high-deductible health plan (HDHP) to be paired with them. HDHPs are great for people with lower incomes but who need more coverage than a low-deductible plan provides.
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High-Deductible Health Plans (HDHP)
A high-deductible health plan (HDHP) is the standard for medical cost-sharing plans. They usually have low monthly premiums but have very high deductibles. This means you pay a lot out of pocket before the benefits kick in. In exchange, you get to keep your monthly premiums low, which makes them great options for people on a tight budget. HDHPs are good for people who rarely go to the doctor. They’re a good choice if you’re healthy and don’t expect any major health issues. They’re also usually paired with health savings accounts (HSAs), which are great for people with lower incomes who need more medical coverage than a low-deductible plan provides.
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Limited-Service Health Plans (LSHP)
A limited-service health plan (LSHP) is a medical cost-sharing plan where companies pay your medical bills directly. If you need to see a doctor, you call the company, tell them what you need, and they’ll get it done. LSHPs are becoming increasingly popular in the healthcare industry. They’re best for people with chronic conditions requiring a lot of care but who don’t want to deal with the hassle of going through insurance. LSHPs are usually paired with high-deductible health plans (HDHPs). This means people who choose an LSHP get additional coverage when they visit the doctor for free.
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Generic Drug Co-Ops
Generic drugs are extremely affordable, but many insurance providers charge you an arm and a leg for them. This is especially true for lower-income people who need help paying for their medications. Many insurance providers offer a generic drug co-op. A co-op is a group of people who band together to help each other pay for medication. You might not always get the medications you need, but co-ops are a great way to save money when you’re on a tight budget.
Conclusion
Medical cost-sharing plans are great for people with lower incomes. They’re helpful for people who need more coverage than low-deductible plans provide but don’t have the money to pay for top-tier plans. It’s important to remember that medical cost-sharing plans are not standard health insurance. They’re often limited to a specific type of coverage and may not cover every type of medical expense. These plans are not right for everybody, but they could be a great option for people on a tight budget who still need more medical coverage than low-deductible plans provide.
