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Health Insurance for the Unemployed

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Limited Benefit Medical Plans

These plans are designed to offer low cost medical benefits for non-catastrophic needs.

Limited Benefits Insurance or 'Mini Med' Insurance is a 'bare bone' health insurance plan that covers basic everyday health care needs such as doctor visits, prescription drugs and basic hospitalization. 'Mini Med' insurance is significantly cheaper than regular health insurance, but also comes with more restrictions and less coverage. Aimed primarily at those who are without health insurance and can't afford other types of coverage.

Limited Benefits health insurance or "mini med" plans as they have been popularly referred to is a relatively new form of individual and group health insurance aimed primarily at people who would otherwise not have any health insurance coverage. Limited benefits insurance was originally introduced as a solution to self-employed individuals and others outside the usual employee health insurance plans such as students and part time workers who buy their own insurance, but have now become quite popular nation wide. It is estimated that up to one million Americans are now covered under some sort of 'mini med' plan.

In spite of the rising popularity of such plans among both employers and insurance companies, the limited benefits plans have stirred quite a bit of controversy among the public and lawmakers, going as far as being temporarily banned in some states such as Washington. The criticism has been, not so much on the actual benefits of the plans, or lack there of, but on widely reported dissatisfaction with the way the plans have been promoted as a substitute for regular group health care plans.

Much of the confusion seems to stem from the fact that some of these plans have a very similar structure to a full coverage medical insurance, including having co-pay for some expenses. Critics have argued that this leads insurers to believe they are dealing with a regular insurance plan and not a limited health insurance plan, while others argue that 'mini med' plans offer insurance to people that would otherwise not be insured.

'Mini Med' health insurance is a 'bare bones' health insurance plan that covers basic everyday medical treatment such as doctor visits, prescription drugs and basic hospitalization for you and your family. It is more like a scheduled health policy plan and not the type of full insurance that most people are familiar with, as there will usually be a cap on the maximum annual payout. If you exceed this amount during the year, you will have to pay the fee yourself.

'Mini Med' plans may offer different levels of treatment based on the premium payments. There is typically an annual coverage level that range from as low as $1000 with the skimpiest providers to as much as several hundred thousands, in which case you may just as well consider a regular insurance plan. A usual plan could include $5000 worth of total coverage for a family. This amount would then cover doctor visits, drugs and other basic health care expenses. A typical limited benefits plan will have restrictions on how many visits are covered annually and how much is covered. Say your limit for doctors consultancies is $500 pr. family member annually and a visit to a doctor is $75, then you may find yourself covered in full for six visits a year with a 'mini med' plan, but if you should require specialist treatment, which can easily run into several hundred dollars, then you must pay the remainder yourself. Otherwise though, the plan pays directly to the service provider, so there is no need to get any money out of your pocket yourself.

The main difference between limited benefits plans and regular insurance plans though, is that limited benefits insurance only provides basic health insurance. 'Mini Med' plans do not offer any coverage for serious illness, hospitalization and surgery. Some limited benefit plans may offer daily rates for hospitalization, but they do not cover any major surgery or other expensive treatment that would otherwise be covered under a more traditional health insurance plan. So called catastrophic events such as hearth surgery or cancer treatment as well as transplants is most certainly not covered.

If you are considering buying limited benefits insurance or you have been offered it by your employer, it is important to understand what you are getting. Limited benefits plans are not aimed at families and individuals who would otherwise purchase traditional health insurance, but at young and healthy people such as students and part-time employees who can't afford regular health insurance and is not in a risk group for serious illness. Take a look at the Pro's and Con's of 'Mini Med' plans to decide if this is the right type of insurance for you:

Pro's:

  • Cheap Basic Health Insurance
    • Limited benefits health insurance is significantly cheaper than regular health insurance and may be the only type of insurance that is realistically available to many people. If you are in college or otherwise outside of full employment and in good health, then this may very well be the best choice for you.
  • Flexible Terms
    • 'Mini Med' plans come in many shapes and sizes, which may be one of the main selling points.

Con's:

  • Low Annual Coverage Caps
  • Caps on Specific Services such as Outpatient Care or Hospitalization
  • Limits on Coverage For Services Such as Mental Health and Rehabilitation
  • Exclusions on Serious Illness such as Cancer Treatment or Major Surgery

'Mini Med' plans are worth to consider if you are currently without insurance and can't afford regular insurance or if your employer does not offer you such. The two main factors to consider, if you are contemplating a limited benefit plan, are age and budget. If you are young and healthy, chances are you will hopefully not need extensive hospitalization or expensive treatment. In this case you will probably be relieved by being able to go to the doctor without having to pay yourself. On the other hand, if you are at an age where you have to consider your health more, then limited benefits insurance may not be the best choice.

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