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Health Insurance Plans: The Pros and Cons

The information below outlines the types of health insurance plans available to U.S. consumers and the pros and cons of each.

Term Health Plans

Pros
  • Affordable premiums than are less expensive than Affordable Care Act health plan
  • Applications for insurance enrollment can be made any time during the year
  • Generally has a broad network of medical care providers and is typically accepted at most of the top hospitals and cancer centers in the U.S.
  • Savings on premiums can be used to buy other care such as dental or vision coverage
Cons
  • Does not cover pre-existing medical conditions
  • Enrollees are still subject to Affordable Care Act uninsured penalty tax
  • Health status and pre-existing conditions evaluated as part of application approval process; applicants can be rejected
  • Prescription drugs may not be covered (or have restricted coverage)
  • Some benefits not covered (e.g. pre and post natal care is excluded)

Affordable Care Act Insurance

Pros
  • Coverage for many generic, brand name, and specialty drugs
  • No review of health; applicants will not be rejected based on health conditions
  • Some people may qualify for subsidies for premium & out-of-pocket costs
  • Wide range of health insurance benefits
Cons
  • Includes health insurance benefits you may not need or want
  • Plans may limit enrollees to narrow network of medical care providers
  • Premiums are expensive without subsidies
  • Unable to enroll in health plan outside of annual enrollment period without a qualifying life event (e.g. moving to a new region)
  • Very high deductibles in bronze plans

Employer-Based Insurance

Pros
  • Coverage for a pre-existing condition can be denied for a maximum of 12 months
  • Employer premium subsidies not treated as taxable benefits for employee
  • Lower premiums are available due subsidization from employer
  • Often has a broad range of health insurance benefits
Cons
  • Coverage ends when the enrollee's employment is terminated
  • Health insurance choices limited to selection approved by employer
  • Health insurance may by subsidized at a lower level by smaller employers