Would it surprise you to learn the majority of people filing bankruptcy are filing due to medical bills? A study recently showed that people with insurance are more likely to file bankruptcy due to medical bills than people without insurance.
A leading contributor to the current medical bankruptcy epidemic is the common misconception that having health insurance is comprehensive coverage that will protect you from major unexpected medical claims. Health Insurance is simply designed to help us as consumers, pay for the extremely high cost of medical care. It has zero function when it comes to getting rid of that staircase or adjusting the bathroom in your home to meet your new needs. Unfortunately, millions of people a year are learning health insurance alone simply isn’t enough to protect you from the financial hardships that come along with catastrophic medical claims.
There are two things almost guaranteed to happen when you suffer from a chronic or critical illness: Your costs will go up and your income will go down. Hopefully you will have an effective health insurance strategy that at best will share the cost of care with you until you have satisfied your spending obligation. For some folks the deductibles are as high as $7,900 and that amount can be met twice on family plans. That’s right, $15,800 in medical bills in one year. This in combination with missed work and time off for recovery becomes the perfect storm for a personal financial collapse.
If you haven’t already taken the time to discuss “Supplemental Insurance” with your agent, reach out soon. Many private insurance companies offer what’s referred to as Lump Sum Indemnity Benefits that simply provide a lump sum cash payout due to a covered diagnosis. A lump sum of cash makes it much easier to handle the very high deductibles that come with today’s health insurance policies. Fortunately, you can purchase supplemental coverage that will pay out much more than just the amount of your deductible. It’s coverage like this that comes in handy when you need to modify that staircase in your home or maybe even make adjustments to your bathroom. In addition to specific policies for cancer, heart disease and stroke, some companies have released updated life insurance policies that do more than simply payout due to premature death. For example, a term life insurance policy that has traditionally only paid out because the insured has died, nowadays can pay a large percentage of the policy value based on the diagnosis of cancer or even a chronic condition. These types of policies are quickly replacing the outdated predecessors.
Especially now that health plans seemingly change every year, it might be the time to start developing an insurance benefits strategy that is designed around your personal income needs in addition to protection from the high cost of care. Remember, Health Insurance pays medical bills, who pays you?