UBP blog

07/22/2009

Isn’t it time insurance actually insured us against medical debt and ensured our financial stability when we’re critically ill?

All across the nation, people are struggling to pay the bills and feed their families. Now, add to this the cost of healthcare, which we all know is on the rise. The economy is still in a recession and people are putting off doctor visits, delaying needed medical care and opting not to fill prescriptions.

Healthcare costs are a huge strain on the budgets of so many Americans, especially those who are critically ill. Many people—even those with employer-provided insurance—who are critically ill face a very difficult dilemma in light of economic pressures, they could either:

  • Keep up the treatments and fall into medical debt
  • Postpone or cut back on treatments they need to beat their disease (and in some cases stay alive) to avoid overwhelming debts

Keep up the treatments and fall into medical debt:

Here’s what could happen…

Meet Frank, an unemployed man with stomach cancer whose COBRA eligibility had run out. He’s forced to enroll in a plan with over $1,000 monthly premiums and a deductible. After having already burned through his 401(k) and skipping several mortgage payments to pay medical bills, he has fallen $60,000 dollars into medical debt and is growing deeper and deeper into debt each month.

Postpone or cut back on treatments:

Here’s what could happen…

Meet Susan, a nonprofit Finance Director in her early 50s who has breast cancer. Her employer-sponsored insurance covered 80 percent of her lumpectomy but after having the procedure done, she quickly met her plan’s annual maximum and had to pay for chemotherapy out-of-pocket. Because of the high costs, she decided to postpone her treatments until the next plan year.

As these two cases show, high cost-sharing and insurance plan maximums lead even the critically ill to plunge deeper and deeper into debt each month or to put off care that could help them beat their diseases.

Fortunately people like Frank and Susan now have a third option.

The third option, Supplemental Critical Illness Plans

  • Purchase a critical illness policy from your employer before your first diagnosis

What critical illness plans do is pay a lump sum benefit to your employees at their first diagnosis of a covered illness. Eligible employees choose the dollar amount of coverage (i.e. the amount of the lump sum that they would be paid if they got diagnosed with a covered illness) and have their premiums for this policy deducted directly from their paychecks.

A critical illness plan would have insured Susan against the prohibitively high costs of the chemotherapy her insurance didn’t cover. She would have been able to go ahead and start therapy instead of putting it off until next year when no one really knows what would be different. It also would have helped Frank pay his deductible expenses and save his 401(k) money for after he’s retired.

Think of your health insurance as a guarantee that you’ll get treated when you get sick and this voluntary benefit as “insurance” that you’ll be able to afford the bills.

We’d love the opportunity to discuss these plans with your company and see how we can help round out your employee benefit offerings at little to no cost to you. So give us a call at 617-859-1777 and we’ll work together to set a date and time.

In the meantime, visit our website at www.universalbenefitplans.com

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