As a way to start, let’s define what I mean by conventional health insurance. The traditional health insurance policy consists of:
Deductible – This is the amount you must pay for a medical event before your health insurance starts paying. In today’s world this discount is usually $3000 or more.
Mineral insurance – After the exemption is met, most policies require the insured to pay a percentage of all medical costs up to the maximum. Typically, the insured pays 20% to 50% of every dollar billed.
Copays – In an effort to make routine healthcare accessible, many policies include paying a copy for doctor’s visits and prescriptions rather than a deductible payment. An example of this is the $10 office visit payment.
Maximum Out-of-pocket Costs – This is the highest amount an insured can expect to pay, regardless of how large the medical bills are. As a general rule, the maximum out-of-pocket costs per person are limited to around $7000. This can be a very misleading number because it assumes all your providers are on your network. If they are outside of your network, your costs can be significantly higher.
And finally the “Network” – Almost every traditional individual health insurance policy is tied to a network of providers. The narrower the health network, the lower the premium. There are too many misconceptions about “nets” for this article. Suffice it to say that “networks” are the (your) enemy of the healthcare consumer.
The Problem Working Americans Face
The problem is simple: For most Americans working in the absence of a subsidy, health insurance premiums are too high and, combined with the extremely high deductible and out-of-pocket costs, healthcare becomes unaffordable. Let’s look at a few examples here in North Carolina.
A 62- and 63-year-old non-smoker couple with the BCBS of NC found that the lowest premium option was $1999 per month for a family of $13,300 with no payouts. A plan with $7000 downloadable and office visit payments of $25 will cost $2682 per month.
Assuming the cheapest plan, the annual cost would be $23,988 per year. And if anyone had a medical event like cancer, the real cost of healthcare would be $37,288. You have to ask: “Why do you have health insurance?”
A 30-year-old non-smoker couple found that the lowest-cost plan would cost $787.84 per month for a family of $13,300, with no down payment. The cheapest plan with co-payments was $1056.88, but $7000 was downloadable and had the most restrictive network. Assuming the cheapest plan, if any member of this young couple experiences a medical event, their total annual cost (deductible + premium) would be $16,454.08. This is devastating money for a young couple.
The simple solution to this problem is Fixed Interest Health Insurance. Unlike a major health policy where the policy pays all eligible costs after the maximum deductible and out-of-pocket amount, the Fixed Benefit Health Insurance Policy specifies exactly how much will be paid for each specified service. Examples of services cited may include: a daily allowance for a 24-hour hospital stay, certain dollar benefits for certain surgeries, a certain benefit for doctor’s visits, and other specified fees. A great Fixed Benefit Health Insurance Policy will have very solid benefits, a wide range of specified covered fees, 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 expenses.
The really great thing about this type of policy is that it encourages the insured to be a better consumer. Knowing how much your policy will pay you for a particular medical service allows you to shop better and negotiate the price. But the really cool thing about this policy is the affordable premium.
The couple, aged 62 and 63, is a real client of mine who has been uninsured for 5 years due to high premiums. I was able to put them on a solid Fixed Benefit Health Insurance Policy with $5,000,000 lifetime benefits for $683 per month. That’s an annual savings of $15,792. As I explained to my client, Fixed Benefit Health Insurance will do a great job of covering 70% to 80% of everything that might happen. If they really did save the $15,792 premium gap, they would have had incredible access to healthcare for very little out of their pocket.
In 2014 I was diagnosed with colon cancer and had my large intestine partially removed (CP44205). At the time, I was covered by a traditional major medical policy. My total out-of-pocket expenses were more than $7,000. If I had a Fixed Benefit Plan that I sold today, not only would my costs be zero, but I would get a check from the insurance company for $4619. Not every medical event could result in a check and many could result in several thousand dollars in out-of-pocket costs, but overall the savings would more than offset these costs.
Therefore, I strongly recommend that you carefully look at the Fixed Interest Health Insurance Policy before you choose to go without any health insurance.