In 2010, one of the greatest health insurance disasters in the United States came at the hands of the Affordable Care Act, affectionately known as “Obamacare.” For libertarians, it represents an affront to individual freedom in the form of restrictive demands on the types of health insurance we have available to us. Obamacare has increased health insurance premiums by more than 120%, up to as much as more than 170% for some families. And, as long as it’s in place, major medical health insurance premiums will continue to climb.
There is an alternative.
A type of health insurance known as a health indemnity plan has been around for a long time. But as major medical plans (the kind you most likely have) became more popular and then became required by government for businesses with more than 50 full-time employees, health indemnity plans became less known.
Health indemnity plans used to feature very narrow coverage such that they didn’t offer much as an alternative, but because of the nature of what major medical plans have become and their outrageous costs, some indemnity plans have become much more fully featured to the point that for the majority of people, they offer as much or more coverage as is needed, often for almost half the cost.
Here’s a couple of examples:
- A 28 year old non-smoker with a family of 5: Around $560 per month
- A 27 year old single person non-smoker: Around $90 per month
- A 48 year old non-smoker with a family of 4: Around $650 per month
- Specific quotes will vary
These are less than most plans available through employers and you can take your plan wherever you go!
Because, under Obamacare, indemnity plans are considered more of a supplemental coverage (they really aren’t), they do not have to follow all of the restrictions of major medical plans that the ACA requires. This frees up consumers to choose a plan with various coverage options, unlike major medical plans that are required to offer only four plan types that must all be the same across all insurance companies. It puts consumers in the driver’s seat to choose their own level of coverage with a lot more options.
With a major medical plan that people use and are familiar with, there is a deductible that must all be paid out of pocket first, then there is a coinsurance amount (anywhere from 20% to 60%) that must be paid until an out of pocket maximum is reached, and then the insurance company pays 100%. Coverage is also different in the insurer’s network of providers and facilities and for out of network. The primary problem with this is that it does not offer any real reward that would encourage people to shop for their healthcare like they would other services. There is simply no incentive to do so.
Imagine what would happen if everyone was rewarded by shopping for healthcare like they shop for a car or for car repairs. It would place market pressure on healthcare providers and facilities such that costs are forced down in order to compete. The market would come closer to working more efficiently in the same fashion that other markets operate. And, consumers start being more in charge of how their own healthcare is carried out and paid for.
Indemnity plans, contrasted to major medical plans, often don’t have deductibles or coinsurance. Instead, they pay fixed amounts according to a fee schedule. Typically the same fee schedule used by Medicare but in some sort of multiple of that. For example, a knee surgery under Medicare might pay something like $5,000, but an indemnity plan might pay twice that amount to keep people more fully covered. If they find a facility and provider to provide that surgery for less, the insured person gets to keep the difference. If the surgery costs $6,000, then the person gets to keep $4,000. So, there is tremendous incentive to shop.
A good, fully-featured indemnity plan will also include services that help you shop. You can call a number and reach someone that will provide you with a concierge service that will provide estimated costs and ratings for quality of service for both providers and facilities. They often also offer teledoc services that allow you to speak with a doctor over the phone for minor ailments in order to save on doctor visits (this would be voluntary). These doctors can even call in prescriptions if necessary, and you never even have to go to their office.
Consumers are in charge, and the health plan is designed for the insurance company to provide assistance to aid in keeping the consumer in charge. A consumer is not confined to a network, because coverage is the same regardless of where the consumer receives treatment. Sometimes networks are available but only exist to offer additional savings if a consumer decides to take advantage.
The reason the United States has had such problems with covering pre-existing conditions under health insurance has been caused by the fact that most of the time, businesses are required to offer coverage to their employees. When employees leave, they might have medical conditions that now must be transferred to another insurance company. If everyone had his or her own health insurance, this would not be an issue. So, a major benefit of an individual indemnity plan is that you can take it with you wherever you go.
You can dump Obamacare and get out of the government-controlled system of healthcare. Dump the plan you have through your employer and save some money along the way. You can actually make a small change in government overreach and control by refusing health insurance controlled by politicians and bureaucrats through your employer or even if you don’t have coverage through your employer. If you are interested in doing so, you can contact me with the information below, and I can show you more specifically how to do it. If you have a business and want to get away from Obamacare and dramatically reduce your health insurance costs, these sorts of plans are well worth a discussion.
Danny Chabino
Independent Health Insurance Broker
(405) 310-9737
Danny Chabino
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