High healthcare costs lead some consumers to turn to limited-coverage plans

Faced with high premiums and deductibles for traditional health insurance coverage, an increasing number of consumers are opting to piece together short-term and critical-illness plans, according to a Kaiser Health News report.

Some consumers are taking those steps even though they face a penalty for not having comprehensive health coverage under the Affordable Care Act. Limited benefit policies such as short-term, critical-illness, accident, dental and vision plans don't qualify, according to KHN

Although it's not very common, even some consumers who have comprehensive insurance coverage through their jobs are finding their plans are too expensive and opting for less expensive and more limited coverage.

Experts say in the face of high costs it is not surprising some people are looking for alternatives to traditional insurance. "They may be making the best decision they can for themselves given their financial and health situation. But it's a roll of the dice, and if something bad happens, they could find themselves on the hook for a very big bill," Sabrina Corlette, research professor at Georgetown University's Center on Health Insurance Reforms, told KHN.

Critical-illness plans, which typically pay a lump sum if someone is diagnosed with a serious illness such as cancer, are a growing business for insurers, as FierceHealthPayer previously reported. Sales of "accident policies," which will pay a lump sum if someone has a qualifying event such as a car accident, are also on the rise, KHN says.

Some carriers are now bundling critical-illness and accident insurance policies together, Nate Purpura, vice president of consumer affairs at eHealth, an online health insurance company, told KHN. But he warns that short-term insurance is designed for a short-term gap and not to replace major medical insurance.

Even with health insurance, many Americans are struggling to pay their medical expenses. A recent survey found one in five working-age Americans who have medical insurance still face medical debt.

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