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How to choose Health Insurance Options: Traditional vs. Alternative Coverage

If you're in the process of enrolling in a new health insurance plan or are about to tackle this important decision, you've likely encountered the overwhelming array of options available. From well-known traditional insurance plans like Medicare and Blue Cross Blue Shield to alternative solutions such as Medi-Share or Christian medical insurance plans, the choices can be daunting. In this comprehensive guide, we'll provide valuable insights into the differences between popular traditional coverage types and alternative healthcare options to help you make an informed decision.


Exploring the Landscape of Health Insurance Plans

Health insurance plans come in various types, each with unique characteristics that significantly influence coverage rules and costs. The most common types include:

  • Exclusive Provider Organization (EPO)

  • Health Maintenance Organization (HMO)

  • Point of Service (POS)

  • Preferred Provider Organization (PPO)

  • Medicare Traditional and Medicare Advantage

  • Medicaid


To gain a deeper understanding of each type, you can turn to resources like Fair Health Consumer for comprehensive information and guidance.

Traditional vs. Alternative Healthcare Options

While traditional insurance plans like Blue Cross Blue Shield are widely recognized and accepted, alternative healthcare options known as "healthcare sharing plans" are gaining popularity due to their affordability. However, it's crucial to understand the drawbacks associated with these alternatives, which may make them less suitable for you compared to traditional insurance plans.

Healthcare sharing plans differ from traditional insurance in fundamental ways. They are not bound by the regulations of the Affordable Care Act (ACA), and over twenty-five states exempt these plans from insurance rules and regulations. This lack of regulation means policyholders may be vulnerable in the event of disputes or denied claims, as the same consumer protections and guarantees do not apply.

Members of healthcare sharing plans contribute a set monthly amount to their own account and then submit requests for help to cover medical expenses. If approved, other members use their funds to pay the healthcare provider directly. However, these plans are faith-based, meaning that expenses not aligned with the plan's belief system are not covered. Additionally, coverage for certain medical services, procedures, or pre-existing conditions may be limited or excluded, potentially leading to significant gaps in healthcare coverage.

Although these sharing plans originated in the 1990s and operate as not-for-profit organizations, their long-term viability can present risks due to their reliance on the concept of sharing healthcare costs among members. Economic challenges or changes in healthcare regulations may impact the stability and sustainability of coverage for members, a factor that should be considered when evaluating these alternatives.


Key Considerations for Comparison


When comparing healthcare sharing plans to traditional insurance plans, there are four key areas to focus on:

  1. Comparison to top commercial insurers. Compare these plans to top commercial insurers like Blue Cross Blue Shield, Aetna, and UnitedHealthcare to gain insights into what sets them apart and why costs differ.

  2. Provider networks. Evaluate the provider networks of both types of plans, ensuring that you have access to your preferred healthcare professionals and quality medical care.

  3. Compliance and consumer protections. Assess the required compliance to state insurance regulation, oversight, and consumer protections to ensure peace of mind in potential dispute situations.

  4. Comprehensive coverage. Compare the comprehensiveness of coverage to avoid unexpected healthcare expenses and ensure consistent coverage for your needs.


Making Informed Decisions


Healthcare sharing plans, while appealing at a base level due to their affordability, may not be recommended for individuals with chronic or complex health conditions. It's crucial to conduct a thorough evaluation of potential out-of-pocket costs, consider the impact of acute and chronic health conditions, and seek assistance from non-fiduciary health insurance navigators to determine the best coverage option. You can start this process by accessing resources such as Local Help Healthcare. Additionally, for independent health sharing plan comparisons, it's advisable to consult a trusted health insurance advisor who can provide personalized guidance based on your specific needs and circumstances.

By understanding the differences between traditional and alternative health insurance options, and carefully considering the factors that impact your coverage and costs, you can make a well-informed decision that aligns with your healthcare needs and financial considerations.

Need help with resolving a medical or dental bill issue? Contact your area's local patient advocate or reach out to MBCR today!

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