Insurance Agent Forum

[Jeanie2]

I have several prospects that need low cost medical insurance which of course means a high deductible policy. Is it ethical to sell this type of policy knowing they can't afford a $5,000 deductible even with an HSA? The last thing I want to do is mislead people but I also don't want to see them completely out in the cold.

[somarco]

Ethical? Are you kidding?

Isn't it better to have something that covers all but $5k vs. nothing at all, or some junky mini-med that will totally hang them out to dry?

A $5k deductible is not high.

Most people have credit card limits higher than that. They think nothing of borrowing $30k or more for a new car but think a $5k deductible is high.

The folks who shy away from a $5k deductible because it is too high are the same folks with a $1500 big screen TV in the den.

Gimme a break.

[Jeanie2]

I agree with what you are saying however I have found several prospects who are making $7-10/hr and they are financially strapped. Part of me wonders if it is better just to let them keep their $80/month premiums and use some government program if they have to.

[agent4sail]

Originally Posted by Jeanie2

I agree with what you are saying however I have found several prospects who are making $7-10/hr and they are financially strapped. Part of me wonders if it is better just to let them keep their $80/month premiums and use some government program if they have to.

Another applicant for my tax dollars; does it ever cease?

[GreenSky]

It's ethical for you to show them their options.

However, at $7 a hour, how long do you think the policy will remain in force? Maybe until the next pay per view.

Rick

[Bob_The_Insurance_Guy]

Point of Clarification:

When you say, "they can't afford a $5,000 deductible." are you saying that, if they get the policy, then immediately go in for surgery, they won't have five grand in cash to pay the hospital?

That very well may be.

That's not the idea behind a High Deductible Health Plan, though. The idea is to raise the deductible amount, saving premium dollars, and put some cash in a safe place, for when, in the future, they need it, it will be there.

This is not car insurance, it's health insurance.

What they're not telling you is that they don't want to go without that copay. You see, you, the member, spend less frequenting the doctor for every sniffle and scratch, therefore gouging the system. That, my dear agent, is the real reason they don't want it.

Just my guess.

[somarco]

As an alternative, you can always offer them a copay plan with a $10k deductible for about the same price as a $5k HDHP.

Assuming both fall in their budgeted range, let them decide which one is best.

[The Rabbi]

I find that people in the low income arena are more interested in outpatient services and drugs that cover their pre-existing.

Insurance is meant to protect assets. No assets = no need for insurance.

What they could use are some indemnity plans if they can't work.

They won't be able to keep up the payments on something they can't use.

Do them a favor and tell them to familiarize themselves with the county health system and eat healthy and exercise.

[Delta76]

Keep in mind that with the $5,000 deductible, most clinics will finance that at a minimal rate (many in my area between 0% to 3%) over a period of 12 months or sometimes longer. So if something big happens and they can't front the money, they aren't completely up a creek.

Plus, consider the scenerio where someone gets cancer and has a $5000 deductible. A spaghetti (spelling?) dinner fundraiser could likely be used to cover the deductible if worst came to worst.

[MikeLevy]

Originally Posted by Delta76

Keep in mind that with the $5,000 deductible, most clinics will finance that at a minimal rate (many in my area between 0% to 3%) over a period of 12 months or sometimes longer. So if something big happens and they can't front the money, they aren't completely up a creek.

Plus, consider the scenerio where someone gets cancer and has a $5000 deductible. A spaghetti (spelling?) dinner fundraiser could likely be used to cover the deductible if worst came to worst.

You hit the nail squarely on the head with this post.

It is better to have insurance regardless of whether the money is in the bank for the deductible or not. Without some form of insurance some hospitals and clinics won't let you in the door. That's dangerous. Ethically, it is your duty to protect your client first. You do not owe the medical providers that duty. The hospitals and doctors can handle that on their own and they have a process for it.

The deductible can be financed or forgiven at the providers option. Financing is commonplace.

Michael Levy
Chairman and Founder
MostChoice.com, Inc.
http://www.mostchoice.com

[robliano]

You might like to look at it like this:

Would they rather pay the $5K (with possible payment options) or be faced with the entire amount if they go uninsured?

Originally Posted by Jeanie2

I have several prospects that need low cost medical insurance which of course means a high deductible policy. Is it ethical to sell this type of policy knowing they can't afford a $5,000 deductible even with an HSA? The last thing I want to do is mislead people but I also don't want to see them completely out in the cold.

[cdpowell]

What is the alternative to your client choosing a high deductible plan? Is it going uninsured? Lets say that your client has a $100,000 claim and they have a $5000 deductible, most hospitals will let them make payments over a period of time. That is more attractive than bankrupcy.

[HealthGuy]

Matty B: An HMO? How does this differ from major carriers most of us offer? Do you mean a smaller, just regional provider as HMO? Sorry I don't get it.

[burlewd]

Keep in mind with the HSA they can make monthly payments to the hospital through the HSA with tax free dollars. 5000. X 20% tax bracket will be a $1000. in tax savings off that bill and if they do not get sick they can use the money for dental, vision, any medical expense. Just make sure that they open a HSA account at the bank. Not all banks have HSA accounts (yet) look for one with no fees.

[LGilmore]

Well I hate to say this but insurance is probably not an option for a $7 an hour worker unless provided by an employer.... a 5,000 dollar deductible is just as big a hole as a 100,000 bill to someone in that cost range. That's basically down so far that looking up doesn't matter.

People making this kind of wage are the working poor. They do need some sort of government program. They are paycheck to paycheck people. These people are making $280 a week, if they're full time.

I honestly don't think there's much you can do in that market as they probably lack savings and much of anything else.

[moonlightandmargaritas]

Originally Posted by MattyB

Well, down here in So. Fla, we have Vista which is an hmo.

If some one can not afford , a ppo plan ...Meaning deductible + co ins, not prem...then an hmo might be an option for them.

HMOs (including Vista) generally have a higher monthly premium than a PPO plan. In addition, they have various deductibles and co-payments. Not sure this is a viable alternative.

[Alston]

Originally Posted by The Rabbi

I find that people in the low income arena are more interested in outpatient services and drugs that cover their pre-existing.

Insurance is meant to protect assets. No assets = no need for insurance.

I disagree. Insurance protects both current and future assets.

While is is true that you can go to the hospital and get care if it is a medical emergency regardless of income and assets, you will be billed.

They will in many cases get a judgment against you if you don't pay the bill.

This may mean that you can never own a house, always pay the highest interest rates for cars and never get out from under. Low income people need health insurance also and HSA plans can be excellent options for them.

A judgment free credit report gives a man or woman more options.

[Jeanie2]

Originally Posted by burlewd

Keep in mind with the HSA they can make monthly payments to the hospital through the HSA with tax free dollars. 5000. X 20% tax bracket will be a $1000. in tax savings off that bill and if they do not get sick they can use the money for dental, vision, any medical expense. Just make sure that they open a HSA account at the bank. Not all banks have HSA accounts (yet) look for one with no fees.

Thanks for this information. I haven't seen any HSA accounts without fees. Can you share this information?