Do the high deductibles and high out of pocket maximum on your health insurance scare you? They should and here’s why. In the last open enrollment period the average deductible that I placed was over $3,000 with an annual out of pocket maximum of over $6,000 for individuals and $13,000 for families. Remember, not everyone is smart enough to get sick or injured in January. A broken bone in December that has X-ray and MRI and cast in the winter will likely have physical therapy in January.
What can you do about it?
I am a believer in an accident policy with a critical care rider. Here’s how it works: you pick a deductible that you can sleep easily with, say $250, and a maximum amount of coverage of say $6000 and you are a family of 4 you would be looking at under $400 per year for a policy that protects against any kind of accident (certain exclusions apply like riots, drunk driving, professional sports). And that $6,000 is per person not total. Two kids falling out of a tree house or playing high school sports can be financially devastating. But what about sicknesses? A separate rider will protect against the financial catastrophe of cancer, heart attacks and strokes. $10,000 of coverage for these critical illnesses would be another $250 a year for all members of the family.
Now this policy does nothing for strep throat or appendicitis but those aren’t really the events that often lead to bankruptcy.
The situation today is that high deductible health plans have shifted responsibility for the lion’s share of health costs away from the insurance company and on to you. Did you know that 60% of bankruptcies in America are medically related?
It is easy to get one of these plans. For accident, the policies are guaranteed issue with no health questions for those under 64 and the critical illness policies are easy “yes” or “no” questions and you will know if you are going to get this policy before you sign the application.
Isn’t this a good time to get a quote so you can sleep a little more soundly at night?
These policies also pay no matter what other coverage you have. If you are in a car accident and you have PIP or if your health coverage paid for it all because you had already hit your deductible or out of pocket maximum, you get to keep the money no strings attached.