Managing Medical Expenses

Jul 13, 2023

43:11

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Medical expenses are a part of life. (Particularly if you live in the United States!)

Figuring out how to budget and pay for well-child checks, sports physicals, ER and urgent care visits, and recommended screenings is confusing and overwhelming. Health insurance is expensive and difficult to decipher. Independent contractors and entrepreneurs typically don’t have access to group plans, and many available plans simply don’t meet the needs of today’s families.

Cost-sharing plans are an alternative for managing medical expenses.

How Cost-Sharing Plans Differ From Health Insurance

Traditional health insurance plans transfer the financial risk from individuals to the insurance company. Individuals (or families) pay a monthly premium and are responsible for deductible and co-pays.

In contrast, when you sign up for a cost-sharing plan, you become a member of a group that shares the cost of medical needs, says Melissa Blatt, founder & CEO of Indipop. Cost-sharing health plans are also sometimes called “health sharing” plans or “membership” or “subscription” plans. Traditionally, most cost-sharing plans were connected with religious organizations, and many required a statement of faith from members. Today, secular cost-sharing plans are available to individuals and families.

With cost-sharing plans, your deductible doesn’t automatically reset each year; physical therapy that’s needed in January due to a surgery or injury that happened in December is not considered separately or subject to a new deductible.