The real reason why many of those 2019 health plans are so cheap

Craig Johnson | November 6th, 2018

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With open enrollment having begun in earnest, it behooves those searching for health insurance plans for 2019 to know exactly what kind of coverage is available to them and their families. There may not be many easy choices.

The options on the official government health care website Healthcare.gov are still complex for many Americans. The federal government spends millions in ad dollars so that Americans can be informed about the changes and updates to Affordable Health Care Act’s online marketplace. But a lot of that marketing budget has been scaled back.

What they’re not telling you about those 2019 marketplace health care plans

That means many of the changes and nuances in the health plans may not be readily apparent or hard to discern. Of course, you already know that all health plans aren’t created equal, i.e. some being Silver, some categorized as Gold, Bronze, etc.

But there are also some health plans in the marketplace that people in the gangster film world might call “Fugazi.” These health plans may look like they’re legit but don’t provide much coverage at all. The thing is, they’re way cheaper, so millions of Americans could be tempted to sign up for them.

Money expert Clark Howard says don’t do it.

“If you go to Healthcare.gov, you may see a health plan that will be remarkably low in premiums, right by the Gold, Silver and Platinum plans, but what you need to know is that the cheaper plans that tend to be half the cost per month usually will require medical underwriting.”

Medical underwriting is a health insurance term that involves insurers trying to figure out whether to extend coverage to you and at what cost and with what limits.

Clark says the thing you need to be aware of is that “These are not what are known as compliant plans.” Basically, these are plans where the insurance company can reject you based on pre-existing conditions or even if they determine that they just don’t like your health profile.

“So you may see a plan and wonder why this one is $474 a month and this one $251 a month, or whatever it may be, ” Clark says. “Potentially, the difference is the cheaper one is non-compliant.”

The 2019 health plans that are higher in cost — the Gold, Silver and Bronze variety — all must cover your pre-existing conditions.

How to tell if a Healthcare.gov plan is non-compliant

“Usually you’ll know it’s a non-compliant plan if they make you do a medical questionnaire,” Clark says. “That would be an automatic tip-off, because a compliant plan takes all people regardless of pre-existing medical conditions. So if you’re asked to fill out any health history, then you’re going to know right away that it’s a non-compliant plan.”

If you cannot afford a compliant plan from Healthcare.gov, Clark recommends that you look instead at one of those religious-based co-ops as the alternative.

“A lot of people are choosing faith-based co-ops. They’re not health plans, per se, but they do provide a much more affordable premium and it is something that has appealed to a number of people who have called me,” he says.

Here’s what to know about faith-based health care.

Listen to Clark talk about open enrollment

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