Health insurance and health plan: discover the differences

If you have to choose between one health insurance or health plan, will know how to choose? Everything will depend on what you want and how much you can spend, so it’s important to know the characteristics of each one well to decide what best suits your situation.

Taking out health insurance is an increasingly common alternative for those who want to benefit from care in the private system, but paying less. The option is even more sought after by those with young children, but also by those who want to avoid queues on the SNS.

Health insurance and health plan: are they the same thing?

Despite the option for these alternatives or complements to the public health system being increasingly common, doubts about what distinguishes them are quite frequent. Some are related to the functioning of insurance and health plans, but also to the designation.

If you do a search on the internet, there are many options, and especially advertisements, in which these designations appear mixed, although they are different things.

Health insurance and health plan have in common that they provide alternatives to publicly provided health care. But in practice they are different.

Health insurance: what is it?

Health insurance allows access to health care such as consultations, tests, surgeries or hospitalization using private means, but paying less than you would pay if you had not taken out this insurance.

That is, the client establishes a contract with the insurer and, upon payment of a monthly amount (or with another periodicity), starts to have access to this care.

Reimbursement and agreed network

Payment is made in two ways: through a reimbursement system or direct payment to service providers in the agreed network. That is, they have an agreement with the insurer.

In reimbursement, the client pays the expense related to the medical act and then receives the contribution from the insurer. In this case, it is necessary to take into account what is stipulated in the contract regarding issues such as:

• Maximum percentages of contribution;
• Capital that is available for each coverage;
• Initial deductible amount for each coverage, if any;
• Maximum period for submitting the request for payment of expenses, which is counted from the date on which they were incurred;
• Maximum period for reimbursing the insured person.

In the agreed network, or copayment, the insured uses an entity with which the insurer has an agreement and will only have to pay the part of the expense not covered by the insurance. The rest is paid by the insurance company.

Reimbursement and copayment: advantages and disadvantages

Both options have advantages and disadvantages. In reimbursement, the customer has to pay the expense immediately and only then receives the contribution. You may, however, have more choice, as you do not have to limit yourself to the entities with which the insurer has agreements.

Already in the agreed network, you have to disburse less right from the start, but it is limited to the agreed clinics, laboratories or hospitals. If you live in a big city, this issue is less of a concern, as the offer is always greater.

There are, however, health insurances that combine the two modalities. In other words, you can resort either to network entities and only pay part of the expense, or use services outside the agreed network, later asking for reimbursement (which also covers only part of what you spent).

Health plan

A health plan is not insurance. and therefore the rules are different. In fact, it’s similar to a discount card. By joining a health plan you have access to health care at a lower price than you would pay under normal circumstances.

The value of the discount varies, but there is, from the outset, the limitation of only being able to use the providers included in the plan. And if you use one that is outside this network, there is no refund.

Access to the health plan also implies a monthly fee or an amount paid periodically to benefit from these discounts.

Because it is not insurance, it is not covered by the legislation related to this activity. That is, it does not have to comply with the same rules nor is it supervised by the ASF.

How to choose between health insurance and health plan?

Thus, as we have already seen, both options have advantages and disadvantages, but what may be less convenient for some people may be perfect for others.

For this reason, and to know how to choose between health insurance and health plan, it is necessary to know the pros and cons of each one.

Health insurance pros and cons

Like all insurance, health insurance has coverages and exclusions. That is, there are situations where you cannot resort to insurance. According to the ASF, situations such as occupational diseases and accidents at work are generally excluded. These cases will have to be covered by compulsory insurance against accidents at work, so this exclusion turns out to make some sense.

Between the exclusions Situations such as nervous disorders and psychiatric illnesses, as well as those caused by alcohol or drug abuse, are also common situations pointed out by the regulator.

You checkup and general health examinations, accidents or illnesses due to participation in sports competitions, treatment or surgery for weight loss, fertilization or artificial fertilization, organ or bone marrow transplantation, aesthetic, plastic or reconstructive treatment or surgery (except if necessary due to illness or accident covered by insurance) are also usually not included.

The same applies to stays in psychiatric establishments, spas, nursing homes, old people’s homes or detoxification centers for alcoholics or drug addicts.

With regard to preexisting diseases – that is, which already existed and which were known and declared when the insurance contract was signed – may or may not be included in the coverage. It all depends on the contract you sign, so it’s important to be aware of this situation.

Another situation to be aware of is the grace periods, that is, the time frame in which coverages cannot be activated. Normally, when you subscribe to health insurance, you can only use it after a certain period of time. This is a way to prevent insurance from being contracted to deal with pre-existing illnesses.

The high price, which increases with age and the fact that it is not possible or more difficult to take out health insurance from a certain age (typically after 60 or 65 years old) can be obstacles to choosing this type of product.

Among the advantages are, as we have seen, the offer diversity with regard to providers and the possibility of having access to an alternative or complement to SNS care.

Health plan pros and cons

In the case of health insurance, the price and the fact that there is no age limit are obvious advantages compared to health insurance. It can be useful, for example, for those who, because of a certain age, are no longer able to subscribe to health insurance or whose budget does not allow them to pay the insurance premium.

Another point in favor is that they do not have grace periods or exclusions due to previous illness, which makes them more comprehensive.

Among the limitations is the fact that it has a more limited offer in terms of providers and that it does not allow reimbursements when medical acts take place outside that network.

Article originally published in July 2019. Updated in December 2022.