proven solution lowering costs
TRANSCRIPT
Presented by: Bill Peterson
In 2011, the average family’s health insurance premium increased to more than $15,000.1
In 2008, the average American family spent less than $2,500 per year in out of pocket medical expenses. 1 This means that a family with a $2,000 major medical deductible is not likely to spend enough on out-of-pocket expenses to meet their annual deductible.
The results is a monthly health insurance premium that is far too expensive for the amount of benefits that are actually used.
1Kaiser Family Foundation
With low-deductible plans, consumers have peace of mind that a major medical event (i.e. an accident or critical illness) won’t deplete their savings or leave them bankrupt.
Unfortunately, the reduced risk of a low-deductible insurance plan comes at a higher cost in the form of higher monthly premiums.
By choosing a plan with a higher deductible, a consumer receives comparable benefits for a lower monthly premium.
The drawback of a high-deductible plan is the considerable amount of money that the insured would pay in the event of an accident or critical illness.
Accidents can create a serious financial burden on major medical policy holders.
Compliment your health insurance coverage with an accident plan that will help cover your deductible, co-insurance and other expenses related to a covered event (up to pre-determined benefit amount)
Every minute: ◦ Two people in the U.S. suffer a coronary event1 ◦ A person dies from a coronary event1 ◦ Two people are diagnosed with cancer2
◦ A person suffers a stroke1 Critical Illness insurance plans pay a lump-sum amount upon
diagnosis of a covered illness or condition. This benefit can be used to cover medical expenses, household expenses, and even help offset lost income from missing work during recovery.
1. Heart Disease and Stroke Statistics – 2008 Update, American Heart Association 2. Cancer Facts and Figures, American Cancer Society, 2006
Every minute: ◦ Two people in the U.S. suffer a coronary event1 ◦ A person dies from a coronary event1 ◦ Two people are diagnosed with cancer2
◦ A person suffers a stroke1 Critical Illness insurance plans pay a lump-sum amount upon
diagnosis of a covered illness or condition. This benefit can be used to cover medical expenses, household expenses, and even help offset lost income from missing work during recovery.
1. Heart Disease and Stroke Statistics – 2008 Update, American Heart Association 2. Cancer Facts and Figures, American Cancer Society, 2006
Major medical • Accident • Critical Illness
Sample family: • Male (40) • Female (37) • 2 Children
Major Medical ($25 co-pay) + Accident and CI
Deductible Office visit co-pay Medical Premium Accident Plan Critical Illness
$5000 $25 $580 $59.95 $48
Total Premium $687.95
Major Medical (no co-pay) + Accident and CI
Deductible Office visit co-pay Medical Premium Accident Plan Critical Illness
$5000 $0 $398 $59.95 $48
Total Premium $505.95
Major Medical ($25 co-pay)
Deductible Office visit co-pay
$1000 $25
Total Premium $965.00
Total savings: $277.05 per month $3,324.60 per year
Total savings: $495.05 per month $5,508.60 per year
Pairing an accident and critical illness policy with a higher deductible major medical policy creates a combined benefit plan that greatly reduces your monthly medical insurance premium. In addition to helping policyholders satisfy their deductible on a major medical plan, the critical illness plan may also provide funds to cover any additional out-of-pocket expenses or lost income that may result from a serious illness.
Major medical • Accident • Critical Illness
Sample family: • Male (40) • Female (37) • 2 Children
Major Medical ($25 co-pay)
Deductible Office visit co-pay
$5,000 $25
Monthly Premium $965
Annual Premium $6,960
Total savings on Premiums: $182 per month $2,184 per year
Major Medical (NO co-pay)
Deductible Office visit co-pay
$5,000 $0 benefit
Monthly Premium $398
Annual Premium $4,776
Major medical • Accident • Critical Illness
Major Medical ($25 co-pay)
Deductible Office visit co-pay
$5,000 $25
Monthly Premium $965
Annual Premium $6,960
Total savings on Premiums: $182 per month $2,184 per year
Major Medical (NO co-pay)
Deductible Office visit co-pay
$5,000 $0 benefit
Monthly Premium $398
Annual Premium $4,776
Average retail price for office visit $120
Average number of office visits per year 10
Average PPO discounted price for office visit w/o co-pay
$80
Annual out-of-pocket costs for office visits $250
Number of office visits needed to justify additional premium
27.3 27.3 =
Additional Premium ÷ Cost of office visit w/o co-pay
$2,184 ÷ $80
$250 =
Average # of office visits X Co-pay
10 ÷ $25
“True cost” for plan with co-pays $2,344 $2,344
=
Additional premium + Annual office visit co-pays
$2,184 + $250
True out-of-pocket cost for each office visit $234 $234
=
“True cost” of plan ÷ No. of annual office visits
$2,234 ÷ 10
Major Medical Plan
Personal Accident Plan
Critical Illness Plan
Enjoy the lower premiums of a higher-deductible major medical plan, and manage your exposure for out-of-pocket expenses by adding an accident and critical illness policy to your health insurance program.
Medical with co-pays ($5,000 Deductible)
$ ________
HSA or no co-pays ($5,000 deductible)
$ ________
$10,000 per occurrence ($100 deductible)
$ ________
$10,000 lump-sum benefit per occurrence
$ ________
Total Monthly Premium
$ ________
