Critical insurance plans have been around for decades, but are recently gaining in number among employers with 90% of policies being sold through the workplace. These special policies pay out a lump sum when there is a diagnosis of cancer, heart attack, stroke, kidney failure, or need for an organ transplant. Companies want to ease the financial burden of high deductibles and other out-of-pocket costs. Last year, 45% of companies over 500 workers offered critical illness plans, up from 34% in 2009. Nearly half of employees with workplace insurance have a deductible of at least $1000, up from 22% in 2009. The average payout for workers is $15,000, while an individual plan pays $31,000 on average. These payments can be used for expenses not covered by employer health plans, such as travel costs to specialists and time off work.
Critical illness policies can have specific requirements and limitations. Pre-existing conditions may not be covered. Certain benefits may be excluded. Some payouts may be partial rather than full for non-invasive cancer, bypass surgery, or angioplasty. If the illness reoccurs, will it pay out again? Policies can set specific amounts or be unrestricted. Some plans may reduce payouts after age 65 or 70. Most plans won’t pay any benefits for the first 30 to 90 days a policy is effective.
As people have more financial responsibility for their medical care and face coverage gaps, people will find a way to get the care they need. Once an employee meets their annual deductible, there is not as much incentive to seek affordable medical care. MediBid offers lower cost plans for employers, lower deductibles, and more options for employees to get care.
Andrews, Michelle. “More Employers Offer Plans That Provide Lump Sums For Critical Illnesses.” News. Kaiser Health News, 5 Jan 2016. Web. 5 Jan 2016.