Whether you get an employer-based health insurance plan or purchase your health insurance policy, the high cost of medical care can be a major challenge. Many people struggle to afford their monthly premiums, co-pays, and deductibles. If you’re one of the many Americans who struggle financially because of your out-of-pocket medical expenses, a medical cost-sharing plan could help you manage those costs.
Also known as an affordable care plan, medical expense plan, or wellness plan, a cost-sharing plan is an employee benefit that helps you pay for medical services. It’s also called an accountable care organization (ACO) or a health reimbursement arrangement (HRA). No matter what it’s called, it can provide financial assistance if you need it. Do more medical cost-sharing plans comparison before deciding. Here are five reasons why investing in a cost-sharing plan is the right choice for you:
You Have Limited Financial Resources
If you’re living on a limited income, you might find it difficult to afford the high out-of-pocket costs associated with medical care. Those costs could significantly impact your finances, either because of their sheer size or because you have to use so much of your income to cover them. Because a medical cost-sharing plan is paid for through payroll deductions, it doesn’t require you to have cash on hand to participate. That’s particularly advantageous if you’re living on a low income or if you’re worried about being able to get or keep traditional health insurance coverage.
Your Health Is at Risk
Another good reason to invest in a medical cost-sharing plan is that your health is at risk. You might have a chronic condition that requires a lot of ongoing medical care, or you might have a serious, high-cost medical condition like cancer. A medical cost-sharing plan could help you manage the high out-of-pocket costs associated with ongoing, chronic conditions. It might also help you pay for the high costs associated with a major, one-time medical event such as a car accident or major surgery. And because many cost-sharing plans require you to pay a monthly premium, you could be protecting your future self by enrolling in a plan now. That’s because monthly premiums could help you build a financial cushion for times in the future when you will have high medical expenses.
Your Out-of-Pocket Costs Are High
You might have a tight budget, but you have high out-of-pocket costs associated with your health insurance policy. And if your high health care expenses are causing you financial hardship, a medical cost-sharing plan could help you manage them. Typically, they consist of a monthly premium, a copay for office visits, a deductible for medical services, and a coinsurance portion you pay after your deductible is met. That could include coinsurance or copayments for prescriptions, tests, hospital stays, and other services.
You Have Little or No Discretionary Income
If your high out-of-pocket costs are cutting into your ability to pay for other necessities in life, a medical cost-sharing plan could help you manage them. You could be struggling to make ends meet because you have high out-of-pocket costs and no other source of income. Perhaps you’re a stay-at-home parent, a student, or someone who’s retired. In those situations, you might be able to participate in a cost-sharing plan.
A Medical Cost-Sharing Plan Can Help You Manage Those High Costs
Finally, you might have high out-of-pocket costs because you need many medical services. If your high medical expenses are due to chronic conditions or serious, high-cost medical events, a medical cost-sharing plan could help you manage those costs. Some cost-sharing plans have a health benefits advisor who can help you determine which plan is best for you. They can also help you determine what services are covered by your plan and your costs. That way, you can decide whether enrolling in a cost-sharing plan is right for you.
The Affordable Care Act and other rising healthcare costs have made it more important than ever for employees to find a plan they can afford that meets their individual needs. One of the ways employers are helping workers meet those needs is by offering cost-sharing plans to help cover the expenses of using their healthcare benefits.
An employee cost-sharing plan provides an employee with reimbursement for specific out-of-pocket healthcare expenses. They’re also commonly referred to as healthcare reimbursement or savings accounts (HSA).
Final Take
If you’re struggling financially because of your high medical expenses, a medical cost-sharing plan could help you manage those costs. You could have a chronic condition that requires ongoing medical care, high out-of-pocket costs, or little or no discretionary income. A cost-sharing plan could help you manage your high costs by assisting with premiums, co-pays, and deductibles. Investing in a medical cost-sharing plan could protect your future self by building a financial cushion for times when you have high medical expenses. Not all cost-sharing plans are created equally, so research your options to find the right one for you.
