AIG type Health Plans

[somarco]

So, Josh . . . you are saying you have actually talked to people who have had $100k claims or are you just promoting your theories?

I have no intent of making this a tit for tat thread. Just looking for an answer to my question.

It can be answered yes, or no.

 

[Sam]

Josh,
If you look at the statistics of ANY insurance product that is available, the % of payout is much lower than the cost of premiums. Title and boiler insurance, might have the higher margins, but to be perfectly frank, if the numbers ever completely justified the product, as in 95% payout for 100% of the premium, then these companies could not afford to pay you and me. Lord knows we need to get paid!

 

[somarco]

The Value Plan is a new venture for AIG. Remains to be seen how well it will work over all. Decent for some things. Compares to Assurity. The plan has only been around for about a year.

 

[joshril]

Josh,
If you look at the statistics of ANY insurance product that is available, the % of payout is much lower than the cost of premiums. Title and boiler insurance, might have the higher margins, but to be perfectly frank, if the numbers ever completely justified the product, as in 95% payout for 100% of the premium, then these companies could not afford to pay you and me. Lord knows we need to get paid!

I agree with what you are saying, but you can insure anything these days.. extended warranties on $800 TV's, warranties on tires, and things like that. I feel that many people can over insure themselves and premium dollars for certain types of insurance can be better used in other places... To each his own. I do not sell supplemental products and never will. When you look at the percentage of people that use a health insurance policy versus the percentage of people that use a dread disease policy, I feel the extra $$$ could better serve the clients needs by giving them a better health policy or through investment.

And yes, Somarco, I know 2 people that have had claims that exceeded $100,000. One was fairly fortunate the other was not. I will not mention the carriers, but the one that was not fortunate was with a less than reputable carrier. The one that was fortunate came out with a little over $8,000 OOP on around $120,000 bill. I believe the hospital even wrote some of the $8000 off, but I don't know how much.

 

[somarco]

Then both, especially the "less fortunate" one, could have benefitted with a supp policy.

Did the one with $8k OOP have savings they could dip in to for paying the bill?

It would appear they did not, otherwise the hospital may not have charged off some of the bill.

 

[joshril]

Then both, especially the "less fortunate" one, could have benefitted with a supp policy.

Did the one with $8k OOP have savings they could dip in to for paying the bill?

It would appear they did not, otherwise the hospital may not have charged off some of the bill.

I don't know, but let's say they would have paid $120/mo for 5 years on a sup plan... $7200 @ 3% and they are just about there...

Also, what percentage of people have hospital claims over $100,000? or even $50,000? I just don't think the risk is justified and we may have to agree to disagree. I will never convince you not to sell sups, and you will never convince me to sell sups... We can still be friends though.. lol

 

[somarco]

Supp plans aren't as expensive as you seem to believe.

$10,000 accident plan, $200/yr.

$10,000 critical illness plan, $150/yr or less for a male under age 45. About a third less for females.

That leaves about $1000+ per year to put into one of your investment deals.

Frankly, after health insurance, most folks would do well to have a disability plan before they do anything in the way of long term investing. Socking away $120+ per month is great as long as you have an income. When that income stops and you have to start drawing it down it may not last very long.

Most should insured their assets in this order before allocating any significant money to long term savings.

Health insurance
Disability insurance
Life insurance
Long term care insurance

About half of all bankruptcies are due to a health related crisis and most of those have health insurance . . . but they lack adequate reserves to cover the OOP expenses. Most of the rest are due to divorce or job loss.

While saving for retirement is something everyone should do, if they don't adequately protect their income & assets, they will never make it to retirement.

Sleep well.

 

[joshril]

Frankly, after health insurance, most folks would do well to have a disability plan before they do anything in the way of long term investing. Socking away $120+ per month is great as long as you have an income. When that income stops and you have to start drawing it down it may not last very long.

Most should insured their assets in this order before allocating any significant money to long term savings.

Health insurance
Disability insurance
Life insurance
Long term care insurance

I totally agree with everything you have just said! Investing definately comes after:

Health, Disability, Life, and LTC (assuming age and income are in the appropriate range)

But, I thought we were talking about things like cancer insurance? I have seen cancer policies for couples in their 40's over $70/mo and hospital indemnity policies even higher than that depending on the coverage. When you start looking at the HI policies you run into someone having to spend quite a long amount of time hospitalized before they really start to pay much. Once again, I agree with the above quote, but just can't see a need for the supplemental stuff. I will agree that if you can find or add something like an accident rider for $10/mo, why not...

 

[J.R.]

I totally agree with everything you have just said! Investing definately comes after:

Health, Disability, Life, and LTC (assuming age and income are in the appropriate range)

But, I thought we were talking about things like cancer insurance? I have seen cancer policies for couples in their 40's over $70/mo and hospital indemnity policies even higher than that depending on the coverage. When you start looking at the HI policies you run into someone having to spend quite a long amount of time hospitalized before they really start to pay much. Once again, I agree with the above quote, but just can't see a need for the supplemental stuff. I will agree that if you can find or add something like an accident rider for $10/mo, why not...

Both of you hit a point that I think is important, but with only one change, as follows; health, disability..... and then supps as a back-up, followed by life, ltc, cable, mercedes, etc. etc.

Get the most bang for your buck with a high quality health insurance to protect you in the event something major happens. Disability should be priority two, or supps as a last resort, unless somebody has adequate savings, and I mean they have access to CASH equaling their OOP at a minimum. Having an HSA combined with an accident policy could motivate somebody to focus more on savings versus spending. If the S#%T hits the fan, at least they will be protected. When the client is able to fund their account to the max OOP, and they no longer feel the need for the accident policy, then they can cancel.

Things like cancer, heart attacks, etc. are very scary, not only from a health standpoint, but from a family standpoint regarding "how are we going to eat w/ dad in a hospital."

 

[somarco]

Both of you hit a point that I think is important, but with only one change, as follows; health, disability..... and then supps as a back-up, followed by life, ltc, cable, mercedes, etc. etc

You left out beer & pizza . . .

Personally, I like plans that pay lump sum CASH.

This includes many of the supps and a few LTCi plans.

Most folks are paycheck to paycheck kinds and anything that disrupts the paycycle puts them in financial jeapordy. Add some extra debt from non-covered items in a medical bill, or OON charges that get hit with a penalty, and all of a sudden they are in trouble.

Many have no idea what their major med deductible is . . . because they have never hit it. Even if they do know, they think their liability stops at the deductible.

Not only are they responsible for another 10 - 30% after the deductible, but hidden providers turn negotiated charges into R&C with balance billing. Suddenly the $3000 or so cap on OOP becomes double or triple that.

Even more so if you have a plan that limits what is paid with artificial caps or unusual exclusions.

You don't have to be a rocket surgeon to understand your major med policy, but you do have to read them, and most people, and a lot of agents, never do.

At least not until AFTER the claim.

I answer a lot of consumer questions in other forums and two of the biggest complaints come in areas that could sometimes be avoided. Serious accidents and major surgery are areas where OON charges seem to hit the most. If you are transported to the hospital in an ambulance, chances are the transport company is a hidden provider, not in any network. As such they are free to charge whatever while your carrier pays R&C.

Incur $1000 for ground transport with a non-par provider and your carrier pays R&C of $700. You get billed the balance.

Air ambulance of $12,000 in a non-par provider and your plan pays $7000 while you get stuck with the balance.

So just how much does your plan pay an anesthesiologist for your surgery? Probably R&C since most gas passers are non-par.

Need lab work? Chances are your lab & pathologist are hidden providers.

How about a radiologist to read your X-rays? Non-par.

Assistant surgeon? Could be non-par.

Physical therapy? Non-par.

The list goes on.

Supp policies are inexpensive because they are rarely used. But when you miss a few paychecks AND come up with an extra $3000+ you did not anticipate they come in handy.