Many Consumers are Paying More than They Can Afford for Benefits They Don't Need - Learning Center

Many Consumers are Paying More than They Can Afford for Benefits They Don't Need

Many healthy thirty year olds are paying more for a Obamacare bronze plan than he/she can afford and almost twice as much as they would for a term health insurance plan.1 Even entry level Obamacare plans must cover ten essential health benefits. This ranges from office calls to psychology services to prenatal care. While this extensive coverage benefits those who will use all or most of these services many are paying high premiums for services they will neither use nor can afford. Term health insurance is a smart alternative for these consumers.

The ten specific health benefits Obamacare is required to cover under the Affordable Care Act (ACA) include:

  • Lab tests
  • Mental health and substance abuse
  • Outpatient care
  • Pediatric services including dental and vision care for kids
  • Physical and occupational therapy, speech-language pathology, psychiatric rehabilitation
  • Pre and post-natal care
  • Prescription drugs
  • Preventive services including counseling, screening and vaccines; care for managing a chronic disease
  • Treatment in the hospital for inpatient care
  • Trips to the emergency room

There is a price for this coverage; the average thirty year old will pay $243.40 a month to purchase a bronze level plan.2 This type of coverage is ideal for a person who engages in risky activities, requires treatment for substance abuse, or an expectant mother. But individuals who are healthy or who do not participate in risky activities, an Obamacare plan is expensive with many unnecessary benefits.

With term health insurance benefits are streamlined to focus on the key services the average person will need such as office calls, specialists, emergency care, in-hospital treatment and lab tests. These benefits are the some of the same benefits required under the ACA. In addition to the key services offered, term health plans often offer discounts on dental care and prescriptions. The deductible for most term health plans are within the range of the Obamacare bronze plan but for often a significantly lower monthly premium. The average thirty year old female can purchase a term health plan for $138.04 per month and a thirty year old male can purchase a term plan for $109.71. This is a forty-nine percent savings over an Obamacare bronze plan.3

Term health insurance is not an Obamacare marketplace plan and therefore may be subject to the ACA tax penalty. There are a number of tax exceptions to explore and often even with the tax penalty term health may be a less expensive option. For healthy individuals marketplace insurance plans come with a high price tag, one many are unable to afford. A term health plan can provide them with the insurance plan they need at a price that is affordable.

  1. Premium Data for 2016 Shows that Term Health Insurance Costs 49 Percent Less than Obamacare for Younger Enrollees, NationsHealthInsurance Report, November 19, 2015.
  2. Id.
  3. Id.