Buyer Beware: Scheduled Benefit Policy: Have you made this mistake?

This is a typical scheduled benefit plan. I advise my customers to stay away from these types of plans at all cost if possible. In my opinion they just don’t offer enough protection.

What does this benefit outline mean:

• Deductible amnount is only                          $500.00
• Primary Daily Hospital Expense Benefit         $2,000.00
  What it does say here is that it’s limited to the first 10 days in the hospital.
• Secondary Daily Hospital Expense Benefit    $1,000.00
• Maximum Hospital Expense Benefit               $50,000.00
• Maximum Intensive Care Benefit                   $10,000.00
• Maximum Outpatient Benefit                         $300.00

This is enough to make my point without even getting into the rest of the benefit outline. This is an actual case that I recently ran across. This person went into the emergency room with severe intestinal cramping. They were dignosed with Diverticulitis. No laughing matter, believe me. This person was admitted to the hospital and had a 6 inch section of their colon removed. Patient was in the hospital the first time for a total of 6 days. The bill, a whopping $50,000.00, came a couple months later for the hospital stay. The carrier would pay according to this scheduled benefit only $12,000 towards the hospital bill. 6 times the daily maximum of $2,000.00. We’re not considering the surgical benefit which was very limited in the first place. So what happened to the rest of the bill you might ask? The patient has to come up with it. They are approximately $38,000.00 out of pocket. Not a very pretty picture. The agent had said they would be covered 100% after this benefit level. What this policy really means is that the stated amount is the absolute maximum the carrier will pay in the event of a claim. They were not told the truth. The customer had no idea what this scheduled benefit really meant. After explaining it to them they told me they would have never bought it had they known.

 

For comparison sake. Lets say this customer had a Health Savings Account type major medical policy with a high deductible of $2,700. What would have happened. The major medical would have paid the bill in full minus the $2,700 deductible. So the customer would have been $2,700.00 out of pocket. They would also have met their yearly deductible, so every claim the rest of the year would have been paid in full. To top it all off the monthly premium for the HSA (Health Savings Account) would have saved this customer a little over $100.00 a month. This savings could have been put into a health savings account and written off on their taxes. 

Customers should ask a lot of questions. If you are still unsure get a second opinion. Call Focus Insurance Group, Inc. We specialize in health insurance. You can run a competitive Illinois health insurance quote directly from our website. After entering the basic information we need to run a quote. You will get a list of different plans (quotes) to choose from. You can also pick up to four plan designs at a time and do a side by side comparison of the plans your interested in. This will give you the information you need to make a qualified decision. No agent will be in your living room pressuring you to sign on the dotted line. 

To run a free competitive quote go to: www.focusinsgroup.com

Tags: Add new tag, Focus Insurance Group, health savings accounts, hsa, Illinois health insurance, Illinois health insurance quotes

HSA’s have grown by 60% for J.P. Morgan

J.P. Morgan says HSA business has grown by 60 percent
Healthcare Finance News
By Molly Merrill, Associate Editor 09/09/08

NEW YORK - J.P. Morgan has reported that its Health Savings Account business has grown by 60 percent in account volume over the last year.

The firm reports seeing a 97 percent adoption rate among eligible employees in HSA programs sold by J.P. Morgan directly to employers.

Officials say much of the success of these new plans is attributed to senior level commitment and employee training and education.

“Employers that have embraced the HSA as a major part of their healthcare strategy are seeing high levels of adoption,” said David Josephs, head of J.P. Morgan’s Consumer-Directed Healthcare business. “Keys to success are a strong plan design with employer contributions and an aggressive education program.”

J.P. Morgan saw early adoption of its program from medium and small businesses that found the HSA as a way to preserve affordable health coverage.

As the HSA is offered along with a high-deductible health plan, employers are generally able to offer their employees lower premiums and put employees in control of how their dollars are spent. The additional tax savings of these plans can also make offering the program much less expensive for the employer than traditional insurance coverage.

“HSAs enable employers and consumers to balance more effectively short- and long-term needs around healthcare expenses,” said Josephs. “With the rising cost of healthcare coverage, health insurance plans that include an HSA help individuals plan for current and future expenses while helping employers and individuals manage healthcare costs.”

Similarly, many large organizations have adopted J.P. Morgan’s HSA program. These organizations come from industries such as manufacturing, retail and financial services, with participation across all salary levels including low- to-moderate income employees as well as managers and executives. According to J.P. Morgan these larger organizations can save up to 30 percent to 40 percent annually using HSAs.

Tags: health savings accounts, hsa