Plans That Will Pay Deductible + OOP Costs?

[FLM2]

I don't know which states (outside of Florida and Georgia) it is available but Family Life has a really good hospital indemnity plan at a very reasonable cost. I was just introduced to it this week and am incorporating it into my client presentations as a 'must have'.

The base plan includes $1,000 a day (except for 2nd day) hospital stays for up to 6 days, $1,000 for outpatient surgery, up to $1800 for accident, and a $400 reimbursement for Mammogram/Pap Smear or $200 for a Prostate exam.

The premiums are about $42 a month so for a woman the cost after reimbursement for the wellness benefits (which are $0 on their health plan) is about $100/year, that, to me, is real value.

 

[junkman]

The best plan I've found is knowing enough and having the discipline to fund an HSA. All of the supplemental plans with small premiums are expensive to market and consequently pay high commissions which I suspect is the reason that they are sold. Even major medical has only an 80% loss ratio which means that on average an insured is paying $1 in premium and receiving .80 in claims benefits.

Funding an HSA gets $1 in claims paid for essentially $1 in premium. Add in tax savings of a 125 plan and you are ahead even more on a guaranteed basis and you don't have to get sick to benefit. Then there is the advantage of keeping your money until it's needed as opposed to paying premium and receiving no benefit unless you're healthy. (I'm talking about 1st dollar coverage being no benefit not later and larger dollar coverage which is a benefit.)

In TN, the difference between a $3000 OOP 100% HDHP and a $5,000 plan is ~ $1,000/year. You are essentially paying $1,000 in premium to gain $2,000 in more coverage. Stay out of the hospital 2 years in a row and you're ahead.

Like I said earlier, there is $30,000 sitting in a bank account and mutual funds that would have been spent on premium or taxes. That sounds like free money to me.

Report back if you find a better deal for your clients with any carrier. I don't think you can beat free money anywhere.

 

[AllenChicago]

Real Life Scenario:

Male Employee and Female Spouse - Ages 59 / 53 $6,000 OOP Each. Group Major Medical that is Non-HSA.

Option 1 - Employer puts $500 a month into a savings plan on behalf of the employee/spouse.

Option 2 - Employer purchases a plan that will pay 100% of Inpatient / 50% of Outpatient costs up to the Major Medical OOP limit. (Pre-X not covered for 12 months) Cost = $120 @ month.

Which of these two options is best for this employee/spouse? Probably, adjusting the $500 down to $380 and doing BOTH 1 and 2 would be best for immediate protection. When savings gets to $12,000, cancel the "GAP plan".
ac

 

[Ann H]

Be careful about what type of supplemental plan can be used with an HSA. YAgents probably knows the answer off the top of his head, and I'm too lazy tonight to look it up. Y? Are you out there? Y?

 

[Yagents]

No time. Watching world series.

Condition specific only plans allowed with h.s.a........accident, cancer, etc

 

[somarco]

AC said this is a non-HSA plan, so I assume any gap plan would suffice.

FWIW, I have never seen a gap plan with such a wide berth as you describe (100%/50%). Most have gotcha's (beyond the 12 mo pre-x you listed).

Is this your dream plan or does someone actually offer it? Group or individual?

 

[junkman]

Allen, You are going around the world to justify selling some crappy supplemental plan or come up with a plan that doesn't exist. If a lower OOP made sense, the employer could simply make it available by offering a lower OOP with the main carrier. They don't because 1st dollar benefits are expensive.

The best option between the 2 choices is to take the $500/month. $500 x 12 = $6,000/yr according to my calculations. It is unlikely that both people have $6000 in claims. That sounds like 100% coverage in my book - AND they get to keep the money until there are claims.

A better option would be to change the plan to make it HSA compliant. That way the money wouldn't be taxable and could be run through the 125 plan.

Does the employer realize that it is taxable now so it won't really pay $6000 in claims? I would love it if an employer could simply "put $6,000 into a savings account" tax free. Unfortunately, anything over $600 turns into a 1099 in my world.

 

[Yagents]

Queue up Don Levit...........3.......2..........1.......

 

[FLM2]

Queue up Don Levit...........3.......2..........1.......

Please don't

 

[tonyisme]

I have a couple age 65 and 75, they are on one of my international major medical policies living outside the USA. They have a 10,000 deductible. They want policy to cover most or all their deductible should a major event occur outside the USA. Does anyone have a product like this? I know for group plans it did exist but I don't know if it exists for International plans for situations like this anyone have any ideas? This client was watching TV and saw this being promoted.