What is not Health Insurance.

By: Taylor


There are many insurance policies often mistaken as health insurance but actually they are not. They may look similar to health insurance but are not health insurance as they do not offer comprehensive health insurance protection. Some of them are discussed below.

Accident-Only Policies

Accident-only policies cover only need of hospitalization and care arising due to accidents. They do not cover other illness. They do not provide comprehensive coverage as health insurance policies. If assessed they are not good value for cost of policy as the customer will not get coverage other than accident.

Dread Disease Policies

Dread disease policies cover cost of treatment for some specific dreaded diseases such as cancer. They are also deemed as poor value policies as they do not cover other diseases or illness. Buying a dreaded disease policy is not advisable as the customer do not get comprehensive coverage as he gets with health insurance policies. Dreaded disease policies are banned in some states and other states have issued advisory of caution against such policies. These policies are normally not renewable.

The Affordable Care Act has made provision that all new health insurance plans for individuals and small businesses and also plans sold through Affordable Insurance Exchange must provide some essential benefits, thus eliminating risky policies such as dreaded disease policies. This will come into force in 2014.

Discount Plans

Discount health plans are plans most often mistaken for health insurance as they have health insurance like features. They charge monthly premium while offering insurance for a wide range of services. They also issue ID cards and advertise a network of providers. They offer discount on providing certain health care services through their network provider. But customers face problems while seeking health care services. They often do not get promised discount. Many state insurance regulators and attorney generals have issued advisory of caution against discount medical plans.

Stacked Policies

Stacked policies are policies which combine different limited coverage plans together, such as accident only policy combined with a dreaded disease plan. Many licensed insurers sell stacked policies. Though it offers wider coverage than limited coverage products, it is not health insurance.

Supplemental Policies

Supplemental policies are policies which offer more comprehensive health coverage by providing additional health coverage than the existing health insurance plans. They complement basic health insurance. Hospital indemnity policy is one such supplemental policy that pays cash benefits for each day spent in the hospital by the beneficiary. There are also supplementary policies for prescription drug coverage.

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