Although they are often confused, health plans and health insurance have distinct characteristics that influence the type of cover, the costs and the beneficiaries’ freedom of choice.
The need to clarify the differences between health plans and health insurance is becoming more and more urgent, as the number of people who want to guarantee access to quality medical care increases. While health plans work as a system of discounts within a contracted network, health insurance covers risks related to the provision of health care depending on the coverage included in the contracts.
With the population’s growing interest in using health solutions that guarantee better and faster care, it’s important to understand what health plans are and what health insurance is, in order to avoid surprises and to ensure that the option you choose meets your real needs for protection and well-being.
In this article, we explain clearly and objectively the differences between a health plan and health insurance, so that companies and individuals can make informed decisions.
What is a Health Insurance?
Health insurance involves an agreement between an insurer and the client whereby, by paying a premium, they can access private medical care included in the policy, free of charge or at a reduced cost.
In practical terms, by contracting health insurance, the insured person delegates to the insurer the responsibility of covering, in part or in full, a series of medical expenses. However, they must pay a premium, the amount of which depends on various factors, such as their age, state of health and the cover chosen.
What is a Health Plan?
The health plan works like a discount card that allows the beneficiary to access a specific network of healthcare providers at agreed prices. Unlike health insurance, the health plan doesn’t include the possibility of using providers outside the established network – nor is it regulated by ASF.
Although there are clear differences, health plans have been widely promoted, often with the support of public figures, which leads consumers to confuse them with health insurance. Read on to avoid any doubts.
What distinguishes a Health Plan from Health Insurance?
Both health plans and health insurance allow access to certain medical care at a reduced cost, by paying a monthly or annual fee. However, there are significant differences between the two options. Health insurance contracts are formalized and regulated by ASF, unlike health plans, which are not subject to this legal framework.
In terms of coverage and network of providers, health insurance offers more advantages, as it includes, in most cases, services such as hospitalization and specific treatments, as well as the possibility of choosing professionals and clinics outside the network, with partial reimbursement of expenses. Health plans, on the other hand, limit the user to a specific network of providers and the costs associated with the services are usually higher than those charged by insurance.
Having received a substantial number of complaints about health plans, ASF, quoted by ECOseguros, believes that it is important to clarify that “in health plans, the cost of future healthcare is paid by the purchaser, even if at a discount, and the risk is not covered on the basis of the insurance technique”. With this in mind, and in the interests of greater transparency in the communication and differentiation between these two products, ASF has published a public consultation on the draft Recommendations on the differentiation between health insurance and health plans.
In short, the choice between a health plan and health insurance should be based on individual needs and the budget available. If you still have doubts, don’t hesitate to contact an experienced insurance broker, such as Famasegur.
