Looking For ACA Healthcare Alternatives? Beware Catastrophic Health Insurance

Health insurance continues to rank among the top concerns of people from all walks of life here in the United States. While it appears ACA health insurance rules may be upheld in the foreseeable future, there are still significant challenges around securing the right health insurance policy.

Health insurance decisions can be difficult on a number of levels:

  • Businesses need to architect sustainable health insurance strategies that meet regulations
  • Individuals whose needs are not met by ACA’s policy architecture must seek alternatives

In particular, successful entrepreneurs have often found ACA options lacking for their situation. Their income makes it impossible for them to benefit from subsidies, creating a significant drag on finances.

Many people are anxious about maintaining healthcare access and will do everything they reasonably can to get a robust, affordable policy. However, those who are young and in good health often wonder whether an ACA policy is really right for them, especially if they are in a state where it is pricey.

A large number of states have refused to accept federal funding or expand programs that could have the effect of making ACA policies more affordable. Differences between states can amount to hundreds of dollars in premium payments each year. And that can certainly change the calculus for policyholders!

Healthy? Under 40? You Still Need Good Health Insurance To Thrive

Unlike the first few years after ACA regulations were passed, there is currently no penalty for failing to hold a health insurance policy. The penalty was removed and shows no signs of returning, but it is still a good idea to purchase a health insurance plan. That’s even true if you are very healthy.

Let’s consider the reasons:

1. The Public Health Situation Can Evolve Rapidly

As 2020 proved, you can never know for sure when there might be a serious risk to your health. Even if you do everything right, you might find yourself in need of care. Using healthcare without insurance is a leading cause of bankruptcy in the United States, which can harm your financial foundation for years. That’s true no matter how successful your current ventures are.

2. Preventative Care Is Essential To Long-Term Health

Good health insurance also covers a full suite of preventative care measures. An annual checkup is an important step in ensuring you age gracefully and get necessary help for any conditions before they become severe. It’s crucial to be alert to any health worries in your family history. With appropriate care and lifestyle changes, it may be possible to avoid a diagnosis down the line.

3. Emergency Care May Cost Thousands Without Insurance

Emergency care can be necessary for a whole host of reasons. Nearly 40 million Americans seek a doctor’s care for accidental or unintentional injuries each year. About 30 million go directly to the emergency department, and more than 167,000 die, making accidents the #3 cause of death from all sources. Emergency care saves lives, and insurance can reduce the cost by thousands.

4. Some Health Insurance Plans Can Offer Additional Family Coverage

If you have a spouse or children, your insurance can help them protect their health, too. Some policies extend full benefits to your immediate family members, while others allow them to utilize a fraction of your existing benefits. Coverage may also extend to other family members classed as dependents on your annual tax filings. Choosing a high-value policy supports those you love and can be cost-effective.

5. Some Insurance Plans Help With Dental, Vision, And Other Needs

Millions of Americans skip out on annual dental appointments, many due to anxiety around going to the dentist. But regular care is essential to keeping your natural teeth in the best condition. And, of course, even many healthy people require annual vision check ups – or will need them shortly after turning 40, when vision tends to start deteriorating with age.

With all this in mind, reliable health insurance can be a sound long-term investment for you and your family. But not all health insurance is created equal. Some plans, such as those deemed “catastrophic coverage,” may leave you with less coverage than you need at a critical moment.

Why Catastrophic Care Plans Are A Dead End For Working Professionals

The value proposition of an ACA plan is that the different policy tiers are easy to compare and understand. However, only a few million people are covered by these plans every year – a relatively small number compared to more than 240 million American adults.

Although ACA has made a difference for many American who might otherwise lack coverage, there are wise reasons to look for additional options. Still, it’s vital to take the process step by step and be judicious. Policies outside of the ACA framework can have complicated rules and exceptions.

One health insurance product that confuses many people is the catastrophic insurance policy.

1. Who Is Eligible For Catastrophic Health Insurance?

Catastrophic health plans are generally only available for people under age 30. Individuals over the age of 30 become eligible for ACA catastrophic plans only in the case of hardship exception. However, there are private insurers outside the marketplace structure who may offer them.

2. What Are The Features Of Catastrophic Health Plans?

Monthly premiums for these plans are very low. They are not eligible for ACA tax subsidies, but they are generally so inexpensive that the assistance would not be necessary. Unfortunately, they have an extremely high deductible that must be paid out of pocket before most services will be covered.

In 2019, that deductible was $7,900. In 2020, it was $8,150. Although there is no telling precisely how much it will be in a given year, it should be expected to increase every year according to the overall costs absorbed by insurance providers for their operations.

3. What Does A Catastrophic Health Insurance Policy Cover?

After the deductible amount is paid for the year, the insurance company pays for all other covered services for the duration of that year. Despite the name catastrophic care, it does not cover emergency medical care until you have paid the full deductible. A small number of essential preventative and primary care services can be covered before the deductible is met.

4. Who Is Eligible For A Hardship Exception?

There are a variety of different factors that can lead to a hardship exception, such as a utility shut-off, and you may qualify for an exception even if you are employed. For example, people displaced by a fire or other disaster can be eligible. That said, most business owners, 1099 contractors, and other entrepreneurs have more effective options that are also budget-friendly.

Get Guidance On Health Insurance For Successful Entrepreneurs Like You

Even for the most informed and conscientious buyers, health insurance can still be tough to figure out. Make the best decision for you with help from our expert team. To learn about ACA alternative health insurance plans that help you keep your costs down while accessing the care you want, contact us.