Health Plan or Health Insurance: Understand the Differences and Choose the Best Option

It is often said that you shouldn’t take health lightly, and this couldn’t be more true given the current situation of overcrowding in public health services, which has led more and more Portuguese people to seek alternative solutions to their health problems.

In this situation, health insurance and health plans play a particularly important role in protecting the health of the Portuguese people, but which one is the best option for you?

Since this is a topic that often causes confusion,the ASF (Insurance and Pension Funds Supervisory Authority) recently launched an initiative aimed at promoting consumer literacy regarding the differences between a Health Plan and Health Insurance, thereby enabling consumers to make choices that are better aligned with their profiles and needs.

Given that this is a highly topical and relevant issue, we are joining forces with ASF to help you learn about the two solutions and choose the one that offers you the best value for money.

What Is Health Insurance?

Health Insurance is a solution that gives you access to a range of health care services as defined by the coverage you’ve purchased and the contractually stipulated coverage limits.

Although the care you will have access to depends on the coverage you have purchased, the most common services include doctor visits, tests, treatments, and surgeries performed at private doctors’ offices, clinics, and hospitals, which generally have lower costs and offer faster service.

As usual, in addition to the coverage, you'll come across some exclusions. Among the most common are:

• Occupational diseases and workplace accidents;
• Nervous disorders and psychiatric conditions;
• Check-ups and general health exams;
• Disorders caused by alcohol or drug abuse;
• Accidents or illnesses resulting from participation in sports competitions;
• Weight-loss treatments or surgeries;
• Fertilization and other methods of artificial insemination;
• Organ or bone marrow transplant.

In the case of preexisting conditions of which the insured is aware at the time the policy is signed, these may or may not be covered; therefore, we recommend that you consult with an insurance broker such as EXS to choose the best insurer for you, based on your medical history.

A waiting period, not exceeding one year, may also be included for coverage of preexisting conditions or other types of coverage, such as childbirth.

It is important to note that the insurance premium is determined not only by the coverage purchased—which may include additional coverage—but also by the insured’s age.

Even though you have paid the premium, you will still need to pay for your healthcare, and this can be done in two ways: through a reimbursement system or a copayment system.

Under the first option, you pay the full cost of the healthcare services you received and then submit the invoice to the insurance company to be reimbursed for the amount spent, in accordance with the terms of the contract—specifically, the available coverage limit and the copayment percentage.

In the second scenario, however, the cost is shared with the insurance company at the time of payment; that is, the insured pays only the portion specified in the contract when using providers in the network.

You should also consider the deductible—that is, the minimum amount you will be responsible for paying.

Advantages and Disadvantages of Health Insurance

Benefits of Health Insurance

• It is subject to supervision by the ASF and, as such, must comply with a set of rules designed to protect consumers;
• It guarantees payment of the expenses you incur in providing health care;
• It helps avoid waiting lists for appointments and surgeries;
• It provides access to private-sector health care at a lower cost;
• Premium expenses are tax-deductible on your income tax return;
• This allows you to add other members of your household or supplemental coverage.

Disadvantages of Health Insurance

• Monthly premiums are typically higher than those of a health insurance plan;
• The existence of an age limit in some insurance policies, meaning that coverage ends when the insured reaches age 60 or 65:
• Some insurance policies do not cover preexisting conditions.

What is a Health Insurance Plan?

A health insurance plan is similar to a discount card; in other words, by paying a certain monthly amount, you’ll be entitled to access health care at lower prices.

Although there are no waiting periods or exclusions for preexisting conditions, the choice of healthcare providers is limited, and if you use, for example, a clinic outside the provider network, you will not be entitled to any reimbursement.

Often, the benefit offered to a company’s employees is this Health Plan rather than health insurance. If we don’t understand the difference between the two, we might assume we’re protected by insurance that covers a wide range of situations, but when faced with a potential surgery, for example, we discover that it isn’t covered after all, because it’s actually a health plan. In these cases, it’s important to supplement the plan with health insurance whenever possible.

Advantages and Disadvantages of a Health Insurance Plan

Benefits of Health Insurance

• Lower costs;
• There are no age limits, waiting periods, or exclusions for preexisting conditions;
• You do not need to fill out a medical questionnaire.

Disadvantages of Health Insurance

• It is not subject to the ASF's strict supervisory rules;
• Limited supply;
• You are not entitled to a refund if you use an out-of-network provider.

Key Differences Between a Health Plan and Health Insurance

The first and most significant difference between health insurance and a health plan is, as we have seen, the fact that the latter is not subject to supervision by the ASF, which, in turn, ensures the transparency of the contract and protects consumers.

Furthermore, if, under a Health Plan, you use a provider outside the network—which is already limited—you will have to cover the full cost, which is not the case with Health Insurance, since, in the latter case, reimbursement in these situations can reach up to 60% of the expenses.

Although it has no waiting period, the health plan offers more limited and less flexible coverage.

Finally, the Health Plan offers standard health care packages; therefore, there is no option to customize coverage. In contrast, with a health insurance policy, you’ll be able to tailor your coverage to your needs and financial situation, thereby ensuring more appropriate protection for you and your household.

The ASF's initiative and its impact on consumers

As we have already noted, the ASF recently launched a public consultation initiative aimed at strengthening a set of regulatory measures to enhance supervision and consumer literacy in the health insurance sector, particularly with regard to clearly distinguishing between health insurance and health plans.

With this initiative launched by the Health Insurance ASF, consumers will now have the tools they need to make more informed choices and ensure that they benefit from a solution that safeguards their financial interests and rights.

In addition to this initiative, ASF offers you a platform called “Consumer Portal”where you can not only access the information you need to choose the best insurance for you, but also provide feedback on your experience.".

Finally, you’ll have access to the Health Insurance Portal and the Health Insurance Observatory, which provide, respectively, relevant content on health insurance and metrics related to this market, as well as a guide that will explain the basics of insurance in a straightforward way.

How to Choose Health Insurance?

Before choosing your health insurance, you should:

• Compare the features of each insurance policy available on the market and pay close attention to the coverage and premiums offered by each one;
• Conduct simulations;
• Do not omit any information so that the risk assessment is as accurate as possible, thereby helping you avoid paying more for insurance or encountering problems when you file a claim;
• Seek the assistance of insurance brokers, as they are equipped to provide you with professional guidance and advice that will help you make a more informed choice tailored to your needs.

How can EXS Seguros help?

If you choose an insurance broker, know that at EXS Seguros you can count on a team of specialized professionals with extensive experience in the health insurance sector who will guide you through the entire process of comparing and Choosing Health Insurance that best meets your needs.

Because different people have different needs, EXS Seguros’ online consulting service will help you customize the criteria for choosing your health insurance coverage, thereby ensuring you the best value for your money and ensuring that you can enjoy the greatest protection at a lower cost.

Still not sure which option is best for you? Talk to an expert at EXS Seguros and find out which health insurance plan best suits your needs. Request a free quote today!

Conclusion

Your health is priceless, and for that reason, when choosing between a health plan and health insurance, you should, whenever possible, opt for the latter because of the flexibility it offers in choosing coverage and accessing healthcare providers of recognized quality, as well as the right to reimbursement for your expenses.