Over the past 10 years, high deductible plans have gone from being the “last resort” to the most common plan offered by employers, and the most affordable for those who pay for insurance coverage directly.{{more}}
While high deductible plans are a way to keep premiums “affordable,” they can present a large financial burden if something unexpected occurs and the deductible is due in one lump sum.
There are ways to “manage” deductible expenses so that one is not faced with a large bill that results in a debt or forces one to dip into long term savings.
Health Savings Accounts – allows one to put aside money on a pre-tax basis to cover the deductible and other medical expenses i.e. dental or vision costs. Some employers will contribute to this account, or reimburse employees for a portion of their medical expenses (Health Reimbursement Arrangement) that are subject to the deductible. Any funds that are not used in a given year may be carried forward to the following year ‘s medical costs.
Hospital Protection Plans – designed to help cover the deductible for an inpatient hospital admission. The coverage generally ranges from $100 to $500 per day per admission. A three day stay in the hospital would generally make the patient responsible for their annual deductible which could put a financial strain on many budgets. The premiums generally range from under $10 to $20 per week, and is offered on a voluntary basis by some employers so that it can be paid through payroll deduction. These plans can also be purchased directly.
Critical Illness Plans – provides benefits if one is diagnosed with a serious illness such as cancer, heart attack, stroke, or kidney failure., and generally pays specific amounts either in a lump sum or according to type of treatment. As with the Hospital Protection Plan that can often be purchased on a voluntary basis through employer or directly through an agent.
Accident indemnity – pays benefits if ihjured on or off the job, and helps with treatment costs ranging from Emergency treatment to follow-up visits , physical therapy, etc. While not a health insurance, it helps cover costs not covered by traditional medical plans (i.e. deductibles and co-insurance).
Short Term Care – similar to Long term care plans, it covers one in an inpatient care facility for a period of time, generally up to 3 months. These plans are less expensive to purchase than Long Term Care plans and are designed to assist with expenses for post-operative, rehabilitative care.
Managing health care costs requires more creativity and strategic planning than it did 10 years ago. The one plan/one premium approach no longer protects us if we need medical treatment beyond the preventative annual doctor visit and screenings. Health insurance agents should be well versed in these supplemental plans and can assist with designing coverage that reduces the risk for a “financial surprise” and that fits one’s budget.
Trish Pearson is a licensed independent insurance agent and certified Long Term Care Specialist. Contact her at 203-640-5969 0r trishpearson281@gmail.com.