On top of keeping up with all the changes with Medicare for 2023, you also need to know the difference between Health Insurance and a Health Benefit Plan. Some people don’t realize the difference between the two or think the terms are interchangeable. A Health Benefit Plan, or Alternative Health Plan, isn’t required to follow the federal regulations made possible under the Affordable Care Act (ACA). A Health Insurance Plan follows the letter of the law and covers anyone who needs it.
The Blue Cross and Blue Shield of Kansas [KE1] team wants to ensure you understand the basics of health insurance along with the benefits and challenges between a health insurance plan and a health benefit plan. Here are the main things to consider when you’re looking at cost comparison versus benefits.
Enrollment process
Health insurance comes with an easy enrollment process and Blue Cross and Blue Shield of Kansas[KE2] team members are ready to help you with any questions. A health benefit plan will require much more paperwork with full medical history for yourself, family members, genetic factors and current illnesses and medications.
Coverage denials
When you have health insurance, there’s no illness or claim history that will cause you to get dropped coverage or denied services. You can be confident knowing you won’t risk being denied a claim.
Health benefit plans track your illness and claim history and can legally drop you from coverage or deny a claim at any time. One important note here is that a health benefit plan cannot drop you because of a mistake or leave out non-essential information on your application. While this is protection at the federally regulated level, it does cover insurance benefits plans “grandfathered” when ACA went into effect. Of all the reasons a medical benefit plan can drop you, a simple mistake isn’t one of them.
Pre-existing conditions
Health insurance plans might ask about pre-existing conditions during regular physician visits, but that information won’t impact coverage. No matter what condition you are dealing with, you can’t be denied coverage because of it.
Health benefits plans scrutinize your pre-existing conditions and could cover you for various reasons, from obesity to cancer.
KNOW THE DIFFERENCE: If you are required to go through a physical, make sure you know why this is required. Some employers require a pre-employment physical to ensure a worker can handle essential job tasks like lifting heavy objects or hearing warning signals. A pre-employment physical wouldn’t be part of the health insurance application process in that instance.
Mandated services
Health insurance will cover legally mandated services as they stand now and any modifications that come, like the updates to the ACA. This helps with health needs like mental health support, pregnancy and chiropractors. Even vision and dental care for children are mandated services.
MORE INFO: ACA in simple terms
Health benefit plan coverage does not follow the regulatory rules of mandated services. You could either face knowledge of the coverage lapses or be caught by surprise when you find out certain milestones or conditions aren’t eligible for coverage.
Regulation
Health insurance plans are regulated at a state level based on federal policy. The Kansas Department of Insurance oversees health insurance plans in our state. While the Health Insurance Marketplace regulations are adhered to by the Kansas Department of Insurance, it’s up to the department to approve plans and review rates. You also have the right, as a consumer, to file a complaint.
With health benefits insurance, you are at the mercy of the issuing entity and have no state or federal regulation to back up your health benefits. It’s important you read the fine print closely to see what is or isn’t covered.
Waiting periods
When you need health coverage, you need it now. Another benefit of health insurance is that there isn’t a waiting period or delay for coverage to begin. Once you sign up for the policy, you are covered. By law, a health insurance plan can wait up to 90 days, but no longer.
Health benefit plans could have a long or short waiting period. During that time, a pre-existing condition or accident could cause a large out-of-pocket expense and risk your benefit plan coverage moving forward.
Health history price impact
Health insurance plans are required to be thorough and transparent with the cost of services, deductibles and co-pays. You will be clear about what is covered, what isn’t, and what percentage you pay for split costs. This information can also help you decide if you want to consider co-insurance.
Health benefits insurance will have full access to your health history and will change costs based on that information. You may or may not be allowed to see the mathematical formula used to determine the increase.
Changing plans
If you opt for a medical benefit plan and get dropped for any reason, you won’t be able to get coverage in the marketplace until the next enrollment period. There are no exceptions to this rule.
For health insurance, you can change plans mid-cycle, but only if there is a “life event” like a marriage or a new child. Otherwise, you’ll have options each enrollment cycle.
3 things to ask when considering insurance coverage
While you’ve reviewed the main differences between health insurance and health benefit insurance, you can generally tell the difference if you ask the provider these three questions
If any of those answers is “Yes,” you’re likely dealing with a health benefit plan and not an insurance plan protected by the Health Insurance Marketplace.
Let us help you
The team at Blue Cross and Blue Shield of Kansas[KE3] is the apex of healthcare in the state and we have knowledgeable and caring team members waiting to hear from you to explain all of your options. Call us toll-free at (800)432-3990, ask a question through our online portal, or visit one of our locations across the state.