December 7, 2021

Open enrollment: It’s time to leave your insurance plan behind

Research shows inadequate health insurance accounts for nearly 67 percent of all bankruptcies. This statistic is staggering, and illustrates a difficult reality for the many American families navigating today’s insurance market.

Not only can medical debt become a heavy burden – it can impact every facet of an individual’s life; compromising financial stability and potentially even exacerbating underlying medical conditions, creating complications due to the stress it causes. The pitfalls of having inadequate health insurance have been broadly analyzed and affect a high percentage of Americans. Unfortunately, the lack of education around alternatives to traditional insurance plans can leave many people in the dark about their options.

Employer-sponsored insurance plans are often the “go-to” option for many people. However, those who don’t have insurance through their employer may struggle to find an affordable individual plan due to their income or health status. Even those who have employer-sponsored plans can fall prey to high deductibles, denied claims, and a mountain of bills to climb after a major health event. The current market leaves little room for flexibility.

In a 2019 Kaiser Family Foundation/LA Times survey about employer-sponsored health insurance, four in 10 of those surveyed reported that their family has had either problems paying medical bills or difficulty affording insurance premiums or out-of-pocket medical costs. About half said someone in their household skipped or postponed some type of medical care or prescription drugs in the past year because of the cost. The study also found that experiences with employer-sponsored plans varied based on an individual’s deductible. The higher the deductible, the higher the likelihood of experiencing problems affording care, opening a Pandora’s Box that can eventually lead to long-term financial hardship, and ultimately, even bankruptcy.

One solution to traditional insurance models is crowdfunding. Crowdfunding models of paying for health care maximize the probability that all members’ eligible bills will be paid in full each month. These models come without the burdens of skyrocketing premiums and deductibles. Unlike traditional models, members aren’t chained to yearly contracts and have more flexibility and autonomy with crowdfunded models. Some potential benefits of electing an insurance alternative like crowdfunding include:

  • The ability to choose your own provider – there are often no or limited “network restrictions,” in contrast with the limited provider networks and pre-authorizations needed with traditional health care plans.
  • Crowdfunded plans are incentivized to ensure members stay healthy to keep member contributions low and retention high.
  • Crowdfunded plans potentially offer members greater long-term savings, as there are no deductibles, which seem to increase each year with traditional plans.

During this open enrollment period, take a look at the costs associated with your current plan and consider alternative options. Traditional insurance plans may not be the most cost-effective, depending on your current health or financial status. Re-visiting the way you pay for health care and trying something new may make the most sense for your health, family, and wallet.

Andy Schoonover is a health care executive.