To begin, let’s define what I mean by traditional health insurance. The traditional health insurance policy is composed of:
The Deductible – This is the amount you need to pay for a medical event before your health insurance starts paying. In today’s world this deductible is often $ 3000 or more.
Co-insurance: once the deductible is satisfied, most policies require that the policyholder pay a percentage of all medical expenses up to a maximum. Usually the policyholder pays anywhere from 20% to 50% of every dollar billed.
The copays – In an effort to make routine health care accessible, many policies include a copay for medical visits and prescriptions instead of having to pay a deductible. An example of this is the visiting office copay of $ 10.
Immediate maximum costs: it is the maximum amount that an insured can expect to pay regardless of the extent of the medical expenses. As a general rule, the maximum direct costs for an individual are limited to around $ 7000. This can be a very misleading number because it assumes that all your providers are in your network. If they are offline, the costs can be significantly higher.
And finally the “Network” – Practically every single traditional health insurance policy is linked to a network of suppliers. The narrower the healthcare network, the lower the premium. There is too much wrong with “nets” for this article. Suffice it to say that “networks” are enemies of the healthcare consumer (you).
The problem for working Americans
The problem is simple: health insurance premiums are too high for most Americans who work without a benefit and, when combined with extremely high deductible and non-refundable costs, health care becomes unsustainable. Let’s take a look at a couple of examples right here in North Carolina.
A non-smoking couple between the ages of 62 and 63 finds that their lowest premium option with NC’s BCBS is $ 1999 per month for a $ 13,300 deductible free of charge. A plan with a $ 7,000 deductible and $ 25 office visit copays would cost $ 2,682 a month.
Assuming the least expensive plan, the annual cost would be $ 23,988 per year. And if a person had a medical event like cancer, the actual cost of healthcare would be $ 37,288. You have to ask, “Why also have health insurance?”
A 30-year-old non-smoking couple found that the least expensive plan would cost $ 787.84 a month for a family franchise of $ 13,300 without copays. The least expensive plan that included copays was $ 1056.88 but had a $ 7,000 deductible and the most restrictive network. Assuming the least expensive plan, if one of the members of this young couple had a medical event, the total annual cost (deductible + premium) would be $ 16,454.08. This is a devastating amount of money for a young couple.
The simple solution to this problem is fixed-rate health insurance. Unlike an important medical policy where the policy pays for all eligible expenses after the deductible and immediate maximum, a fixed-benefit health insurance policy determines exactly how much will be paid for each specified service. Examples of specific services could include: daily allowance for 24-hour hospital stay, specific dollar allowance for specific surgery, specific allowance for medical visits and other specific charges. A large fixed-benefit insurance policy will have very solid benefits, a wide range of specified covered expenses, a very comprehensive surgical program and more. The most important service that the fixed-benefit health insurance policy can include is the negotiation of medical bills, a service that can significantly reduce out-of-pocket expenses.
The really cool thing about this type of policy is that it allows policyholders to be a better consumer. Knowing how much the policy will pay you for a particular medical service allows you to better buy and negotiate the price. But the really cool thing about this policy is the affordable prize.
The couple between 62 and 63 is a real client of mine, uninsured for 5 years because of the high premiums. I was able to get them into a solid fixed-benefit health insurance policy with a lifetime grant of $ 5,000,000 for $ 683 per month. That’s an annual savings of $ 15,792. As I explained to my client, the fixed-benefit health insurance policy will do an excellent job covering 70 to 80% of everything that can happen. If they actually saved the $ 15,792 difference in the premium, they would have incredible access to healthcare with very little of their own pocket.
In 2014 I was diagnosed with colon cancer and had partial removal of the large intestine (CP44205). At the time I was covered by an important traditional medical policy. My out-of-pocket expenses were over $ 7,000. If I had the fixed-benefit plan that I sell today, not only would my costs have been zero, but I would have received a check from the insurance company for $ 4,619. Not all events doctors would have involved a checkup and many could have involved immediate costs of several thousand dollars, but in general the savings would more than compensate for these costs.
So before choosing to take out health insurance, I strongly recommend that you consider a fixed-benefit health insurance policy.
by Mel A. Schlesinger