Health Insurance Alternatives

As most people are by now aware, the passage of the Affordable Care Act (ACA), also called Obamacare, requires that all Americans obtain “mandatory minimum coverage” when it comes to health insurance. The upside of the implementation of Obamacare has been the provision of affordable insurance options for millions of previously uninsured (and uninsurable) Americans. However, the ACA also mandated that every citizen adopt a measure of personal responsibility by carrying health insurance coverage. Should you fail to meet minimum standards for coverage as set forth under Obamacare, you will face penalties (i.e. fees) at the end of the year.

In essence, there are no longer alternatives to carrying individual health insurance. If you elect to go uninsured, even if you are prepared to pay out-of-pocket for your medical expenses, you will find yourself on the hook for penalties, which will be applied to your federal income tax returns for any years during which you failed to obtain appropriate coverage. There are, of course, exemptions. If, for example, you are not required to file a federal income tax return because of low income, you may also be exempt from the mandate to obtain health insurance coverage. There are other qualifying factors for exemptions, as well. However, you will have to apply for exemption in every case, regardless of whether or not you meet criteria for eligibility.

That said, the vast majority of Americans will not find themselves in the exempt category, and will therefore be required by law to maintain minimum essential coverage. The good news is that you do have several options to explore. You can sign up for coverage through a government sponsored health insurance marketplace (or exchange) or you can sign up directly from the insurance carriers through a licensed agent or broker. If you elect to sign up for Obamacare through healthcare.gov, or through your state’s health exchange (if your state has one), you can still work with a licensed agent but there are Marketplace Representatives available to help you as well. Either way, you’ll be able to apply for health insurance, see which plans are available to you, and purchase a policy that best suits your needs in terms of coverage and affordability.

Particularly if you are from a low-income household, applying for coverage through healthcare.gov or your state’s health insurance exchange could allow you to receive low- or no-cost health coverage. If you sign up directly from the insurance carriers, you will not be able to receive reduced rates without first being forwarded to the proper health insurance marketplace. If you know you will not receive reduced rates, or if you simply do not want government assistance in paying your monthly insurance premiums, you can sign up directly through the carriers website or over the phone — some companies like BCBS, UHC and Humana have local offices nationwide as well. But ACA/Obamacare regulated plans are not the only option for health insurance.

Many health insurance companies now offer very competitive Short Term Medical plans. These plans are not regulated under the ACA and are becoming increasingly similar to the insurance plans offered before the Obama administration’s healthcare reform changed the industry. There are two main drawbacks to short term medical. The first is their lack of coverage, or even denial, for preexisting conditions. The second drawback is that short term polices are not considered qualified coverage under the ACA and therefore you could still be penalized at tax time as if you did not have health insurance. However, many healthy and younger individuals and families find that short term plans work well for their insurance needs. This is mainly because short term plans are significantly cheaper than ACA/Obamacare regulated plans (if you do not qualify for reduced rates). Additionally, short term plans still have deductibles to help prevent you from going into bankruptcy if something catastrophic happens. Some plans even have co-pays and ancillary coverage like dental and vision.

Just at Obamacare required individuals to carry insurance, the law also set requirements for employers to cover their employees as well. You may be able to obtain coverage for yourself, your spouse, and/or your children through benefits offered by your employer. This tends to be the best and most affordable option, provided your employer offers such policies.

Yet another option for coverage is through government provided programs like Medicaid and Medicare. Medicaid is reserved for extremely low income individuals, families and children. Medicare is coverage for people over 65 years old or for those who qualify for disability.

Applying for coverage under Obamacare is not the best option for everyone, but it does provide affordable healthcare options for many Americans. However, there are alternatives to explore if you feel for whatever reason that options within Obamacare aren’t right for you.

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