When perusing articles about health insurance for individual families, there is a lot of back and forth about the best type of policy for you to buy. One thing that we see in a lot of these articles is the phrase junk health insurance. Honestly, there are some junk policies out there. But to quantify any health insurance policy sold in Texas that is not compliant with the Affordable Care Act minimum requirements is dangerous at best and ignorant at worst. Our entry on the seven key things to consider for buying health insurance can go a long way to helping you determine if a policy is right for you. But how do you know what is and is not junk?
All Policies Can Serve A Specific Purpose
There are many different kinds of health insurance policies available in Texas today. This market place has exploded over the last 18 months as legislation changes made various options possible again. Do we recommend all of these policies and companies offering them? Not in a blanket fashion, no. But they can all serve a purpose if your needs align with how that policy is constructed. Let's consider some examples of health insurance policies that Insurance For Texans offers to better understand what I mean.
A MEC (Minimum Essential Components) Policy is actually considered compliant by the Affordable Care Act (ACA). The policy is designed to cover what the ACA considered to be core coverage that had to be included to get that compliant tag. The MEC will offer you a well check, immunizations, other preventive care like colonoscopies and mammograms, and some very low lever pharmacy benefits. It does not usually include other regular doctor visits, hospital care, or ER visits. These health insurance policies tend to be extremely affordable from a premium standpoint, but lack some substantial coverage if you have much utilization. As a result, Texans often feel ripped off if they have them unless they pair them with some additional coverage to protect against those big events.
An Indemnity Policy by itself is not considered compliant by the ACA. The policy is often referred to as a fixed benefit policy as it will give you a set amount of money when a specific condition is met. An example would be $80 for a regular doctor's visit or maybe $2,000 for a day spent in the hospital. These policies are often described as junk in news articles because of their very limited scope of benefits and the fact that they don't meet that Minimum Essential Component definition. However, when Texans pair this kind of health insurance policy as part of a Catastrophic Health Insurance Plan their opinion changes. The indemnity policy covers their out of pocket expenses while the other two components cover their major health expenditures while keeping monthly premiums in check.
A Short Term Medical Insurance Plan is not considered compliant by the ACA, but does fill an important role for the Exchange. It's original intention was to bridge gaps between previous coverage and enrolling in an Exchange Plan. These health insurance policies can now be written for up to three years in length, and are often considered junk by the pundits. When you begin to compare the benefits and price against the Exchange plans, the junk status becomes a head scratcher. While the Short Term Medical Plans do not cover maternity benefits, mental health coverage, or wellness exams; the deductibles and maximum out of pocket costs for care are very similar. Knowing that, when you compare monthly premiums between the two a compelling argument can be made that not only are they not junk but that they are incredibly useful for the right Texans.
How Do I Determine What's Junk And What's Not?
Ultimately, working with an independent insurance adviser who can work as a fiduciary on your behalf is of utmost importance. Since the adviser is putting your best interest first, the junk determination can be set by your specific needs and budget. You will want to consider the following factors.
- How Do I Typically Use Health Insurance?
- Do Doctors or Facilities Need To Be On A Network?
- What Is And Is Not Included?
- How Am I Expected To Pay For On-going Care?
- Do Pre-Existing Conditions Matter?
What we've found is that Texans can make informed decisions about the right policy when they begin to consider what they want out of plan and how to subsequently get it. Trying to fit 26 million Texans into the same box just doesn't work. We're as independent as they come.
If you are not sure of your options, hit the blue button below and we can begin to determine what your needs are for your specific situation.
