Discount Plans versus Health Insurance

Do you pay for health care with cash, or do you have some kind of discount plan? Join our discussion below to start a conversation on what is better:

Cash, or a Discount Plan?

Are discount plans the way to go, or will people need health insurance in the future? Is paying out of pocket too difficult for most people these days with the costs of deductibles and copays so high? Is that why there are so many people who rely on Obamacare plans as opposed to simply buying coverage through work if they can get it (affordably)? Maybe we should just ditch both plans and go back to being able to buy private insurance without pre-existing conditions. On the other hand, how would we handle the uninsured if we no longer had health insurance? That's a question for another day.

Discount Plans Versus Cash Health Care

A discount plan is a type of health care or medical insurance that provides a discount off of what the company pays for hospitalization. These plans are usually created from a group policy from an employer or union, but may also be purchased individually. Many employers offer discount plans to their employees as part of their benefits package, and many unions require that any individual enroll in one if they want to become a member of the union. These types of plans are typically more economical, in that they have lower deductibles, co-payments, and premiums than "standard" insurance policies. However, there are some trade-offs to consider: the premiums tend to be higher due to the lower ceiling on benefits (these can range from a few hundred to a few thousand dollars), and there is no protection against rising health care costs beyond what is imposed by general inflation.

What's a "Health Insurance Plan"?

A discount plan is usually purchased when an individual needs to purchase health insurance on their own, either due to lack of employer-based coverage, or simply because they want to get a better deal by purchasing it on their own. The Affordable Care Act (ACA) also instituted stipulations that prevent insurance companies from denying coverage based on pre-existing conditions, and also allow children up to age 26 to be covered under their parents' plans. If you buy a plan on your own due to a pre-existing condition, you can still purchase the same discount plans offered through a group policy, but you'll have to pay full-price. The ACA was designed to offer people the chance to purchase coverage with pre-existing conditions and not be penalized for them – it's why so many people do not need to rely on their employer for coverage any more.

"Cash" Health Care Plans Versus Traditional Medicine Discounts

The ACA has also been criticized for the instability of the exchanges and higher deductibles instituted by some plans – right now it seems like there are more negatives than positives attached to having an "insurance policy". This is a familiar catch-22 for those who need to purchase their own insurance, since the only plans that are available are the ones that don't cover much, and you can't get coverage through work because of a pre-existing condition. If an individual can get coverage from their employer, they may prefer to do so for lower premiums and more coverage – especially if they have a spouse and children covered on the policy. This will be an interesting trend to watch going forward.

In the end, there is no one correct answer to whether or not discount plans are better than health insurance. It will come down to how well you can manage your own deductibles and copays on a case-by-case basis – if you are good at managing your out of pocket costs, then a discount plan may be the way to go. If you tend to let things slide, then a cash health care plan may be a better option for you. Either way, it's best to understand what your insurance options are and make choices that will work best for your own situation.

What are your thoughts on discount plans versus health insurance? Do you have a personal preference? Join the discussion below!

DISCLAIMER: This article is for educational purposes only, and does not constitute financial or medical advice. The content provided is not intended to be a substitute for professional medical advice, diagnosis, or treatment. Always seek the advice of qualified health providers with any questions you may have regarding a medical condition.

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Conclusion

And remember, HERE are some of the best ways to save.

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