As a way to start, let’s define what I mean by traditional health insurance. The traditional health insurance policy is made up of:
The deductible – This is the amount you must pay for a medical event before your health insurance begins to pay. In today’s world, that deductible is typically $ 3,000 or more.
Coinsurance: Once the deductible is met, most policies require the insured to pay a percentage of all medical costs up to a maximum. Typically, the insured country ranges from 20% to 50% of every dollar billed.
Copays: In an attempt to make routine health care accessible, many policies include a copay for doctor visits and prescriptions instead of having to pay a deductible. An example of this is the $ 10 office visit copay.
Maximum Out-of-Pocket Costs – This is the most an insured can expect to pay regardless of the amount of medical bills. As a general rule of thumb, the maximum out-of-pocket costs for an individual are limited to around $ 7,000. This can be a very misleading number because it assumes that all of your providers are in your network. If they are out of network, their costs can be significantly higher.
And finally the “Network”: Virtually all traditional individual health insurance policies are linked to a network of providers. The narrower the health care network, the lower the premium. There are too many errors with the “networks” for this article. Suffice it to say that “networks” are the enemy of the healthcare consumer (you).
The problem facing American workers
The problem is simple: Health insurance premiums are too high for most working Americans in the absence of a subsidy, and when combined with an extremely high deductible and out-of-pocket costs, health care becomes unaffordable. Let’s look at a couple of examples right here in North Carolina.
A 62- and 63-year-old nonsmoking couple discover their lowest premium option with BCBS of NC is $ 1999 per month with a $ 13,300 family deductible with no copays. A plan with a $ 7,000 deductible and $ 25 office visit copayments would cost $ 2,682 per month.
Assuming the least expensive plan, the annual cost would be $ 23,988 per year. And if either person had a medical event like cancer, the true cost of medical care would be $ 37,288. You have to ask yourself, “Why even have health insurance?”
A 30-year-old nonsmoking couple found that the least expensive plan would cost $ 787.84 per month for a $ 13,300 family deductible with no copays. The least expensive plan that included copays was $ 1,056.88 but had a deductible of $ 7,000 and was the most restrictive network. Assuming the least expensive plan, if any of the members of this young couple had a medical event, their total annual cost (deductible + premium) would be $ 16,454.08. That is a devastating amount of money for a young couple.
The simple solution to this problem is fixed benefit health insurance. Unlike a major medical policy in which the policy pays for all eligible expenses after the deductible and out-of-pocket maximum, a fixed benefit health insurance policy sets out exactly how much will be paid for each specified service. Examples of specific services may include: daily benefit for a 24-hour hospital stay, specific dollar benefits for specific surgeries, a specific benefit for doctor visits, and other specific charges. An excellent fixed benefit health insurance policy will have very strong benefits, a wide range of specific covered charges, a very comprehensive surgical program, and more. The most important service that a fixed benefit health insurance policy can include is medical bill negotiation, a service that can significantly reduce out-of-pocket costs.
The really good thing about this type of policy is that it allows the insured to be a better consumer. Knowing how much your policy will pay you for a specific medical service allows you to better shop and negotiate the price. But the really great thing about this policy is the affordable premium.
The 62 and 63 year old couple is a real client of mine who had not been insured for 5 years as a result of the high premiums. I was able to fit them into a solid fixed benefit health insurance policy with a lifetime benefit of $ 5,000,000 for $ 683 a month. That’s an annual savings of $ 15,792. As I explained to my client, the Fixed Benefit Health Insurance Policy will do a great job of covering 70% to 80% of everything that may happen. If they actually saved the $ 15,792 difference in premium, they would have incredible access to health care with very little money out of their own pocket.
In 2014 I was diagnosed with colon cancer and my large intestine was partially removed (CP44205). At that time it was covered by a traditional major medical policy. My total out-of-pocket expenses were more than $ 7,000. If I had had the fixed benefit plan I’m selling 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 resulted in a check and many could have resulted in out-of-pocket costs of several thousand dollars, but overall the savings would have more than outweighed those costs.
Therefore, before you choose to do without health insurance, I strongly suggest that you carefully consider a fixed benefit health insurance policy.
