Health Insurance Values » HealthLog with Dave Keller

An affordable health insurance option

In the 1950s, large console radios dominated living rooms across the United States. Families who did not have televisions listened to radio programs for their evening entertainment.

However, by the mid 1950s, transistor radios became increasingly popularity. While the large console systems provided vastly superior sound, the transistors were small and could easily be taken to the beach or the park. Teenagers who wanted to listen to music away from the supervision of their parents fueled the transistor radio growth. The sound was tinny, but it was the best available to them, so that made it good enough.

Much like the early transistor radios, limited benefit medical plans are good enough for many people. Limited benefit plans pay a fixed amount for specific health care needs such as generic drugs, office visits and hospitalizations.

Before you purchase a limited benefit plan, you need to know their limitations. It is important to understand that these are not major medical plans, and a large medical bill may leave you with a significant out-of-pocket exposure.

Most limited benefit plans combine PPO discounts with a fixed reimbursement to a provider. For instance, a limited plan may pay $1,000 per day that you are hospitalized or $75 each time you visit the physician. You can use these reimbursements to pay your provider. Many of the better-known plans offer access to a preferred provider organization (PPO), which gives you discounted services when you visit network providers and makes your dollar go further.

Because these plans are limited nature, the cost is often dramatically lower than a major medical plan, and some plans start as low as $100 per month. For healthy people who are not concerned about hospitalizations, a limited benefit plan may be an economical way to provide coverage for office visits, generic drugs, wellness and accidents.

Limited benefit plans are also a good way to fund a higher-deductible plan. Customers who cannot change carriers due to health issues may find it more economical to drop their office visit and prescription copayment, raise their deductible and purchase an underlying limited benefit plan to fund their deductible and help pay for office visits. Because you have access to network discounts, you may find that the $50 or $75 reimbursement at the physician’s office is actually more coverage than a $35 or $50 copay.