insurance

Health Insurance Premiums Too High?

If you are purchasing health insurance with a fairly low deductible and comprehensive coverage, you are surely paying a lot for it. If you buy a private major medical plan, you have to pay the whole deductible. But even if you get group benefits at work, you may have some choices. By taking the lower deductible option, you are probably agreeing to contribute more of the premium every month. Is there a way to make sure you family is well covered, but still pay a bit less?

Supplemental Health Insurance May Help

If you can purchase a supplemental health and accident policy, in addition to major medical, you may be able to tailor a great solution. Now all policies are different, and you will have to choose from products that are on the market in your area or allowed by your company benefit plans. But many supplemental health and accident policies actually pay cash for covered health issues. That cash can help you cover deductibles and copays, and it can even be used, sometimes, to pay for some things that a major medical plan does not even cover.

Look at an example. Let us say you purchase major medical with a $1,500 yearly deductible. That means that you will have to pay the first fifteen hundred dollars of your medical expenses every year. Most plans start covering at some percentage after that deductible is used up. Let us say your plan pays 80% up to a yearly maximum of $5,000. After that, the major medical plan kicks in at 100%.

An Example Accident With Major Medical Only

In our example, one of the covered family members breaks his leg. This requires a trip to the emergency room and then a few visits to an orthopedist for treatment. We will say the ER visit cost $2,000 which is not an unreasonable assumption. Four visits to an orthopedist for treatment cost $600. So the total bill is $2,600, which does not even include the time lost at work, transportation, etc.

The insured person has to pay the first $1,500, assuming they have not used any of their deductible yet. The insurer agrees to pay eighty percent of the next $1,100, which is $880. So the insured person will still have to pay another $220, bringing the total bill to $1,720.

So far, in this very typical example, the insured person has paid more than the insurer for a common accident.

Our Example With Supplemental Health Insurance And Major Medical

But what if they had actually paid less for a major medical insurance policy with a $2,500 deductible and supplemented that with an inexpensive supplemental accident insurance policy that paid out $2,500 in cash for an accident?

The insured person would only have to come up with $100 out of pocket, and since they had already reached the yearly deductible in this accident, they would not have to worry about it if they needed more medical services later in the year.

Now keep in mind that this is just an example. The numbers I used are from some typical major medical and accident policies, but may not represent an actual case. That all depends upon what types of health insurance plans are marketed in your area or workplace. However, it should give you a starting point to understand how supplemental health insurance can work well for you!