STM and Proposed Changes
- Thread starter bluemarlin08
- Start date
- 8,448
One company has put out a very biased matrix comparing STM to Fixed Indemnity. Fixed Indemnity wins by a long-shot. (Continuation of Coverage, No Deductible, No limit on duration..) Of course, none of the benefits of STM were illustrated.
- 1,800
Do they list the individual coverage limits on their no deductible reimbursement plans? There is no comparison with plans that have a deductible, coinsurance and maximum annual out of pocket (up to policy max, often $1mil.) I can't imagine a fixed indemnity that has anything close to a potential $1 mil. payout.
No limit on duration and continuation are good features, and either way the purchaser will have some heavy out of pocket in a catastrophic illness or accident. Still better than no coverage.
- 8,448
The last one I sold was in 2011 from Philadelphia American. It had a $1 million coverage limit and zero deductible. To get to $1 million though, you had to spend weeks in the hospital.
But that was my last Fixed Indemnity for a reason. The company refused to pay $22,000 of hospital/medical expenses, claiming that they were related to a liver disorder the client had 8 years earlier. You can imagine how angry he and his wife were at ME for selling him this "garbage".
To help soothe things over, I met with the client/spouse and helped submit letters requesting re-consideration to Phil Am, and filing complaints to the Dept of Insurance. In response, the company sent me an agent questionnaire to fill out, and so did the Illinois Dept of Insurance. After weeks of this, the end result was a reduction of his outstanding bill from $22,000 to just over $18,000. For a Husband/Wife/Child on a $35,000 salary, this was still a huge amount of $$$.
They set up a payment plan, and forgave me enough to allow me to help them get on a subsidized ObamaCare plan in 2013. But who knows.. it could have just been a Philadelphia American issue with how they operate. Needless to say, I didn't want to have anything to do with them from that point forward.
I suppose each of us have our likes and dislikes, based on personal experiences with specific companies and plans. For many agents and consumers, Fixed Indemnity is probably a good fit. Depending on what does or does not come from our new HHS Secretary this year, I may seriously re-visit the fixed-indemnity option again. It just won't be with Phil Am.
- 10,826
One of my annuity client just lost his job, 2 years before being Medicare eligible. Cobra is cheaper than individual premiums at his age. He would go ahead and retire now, but can't afford $1,500 per month for insurance. STM is not an option because of preexisting condition.
So he hopes to find a part time gig with benefits. Sad. And terrible economically for this country in many ways.
This is absolutely the segment (55-64) that is in trouble. Indy is more than COBRA. And if they aren't working, their income is greater than 300% FPL (300-400 gives basically no help)
Is 2 person group an option?
- 10,826
Unfortunately not really in this situation. Long story short, he has a few possible options and I think he will be fine. Worst case he will pay a few months of COBRA premiums. But many are not that fortunate.
If I'm not mistaken, he is in a catch-22 because subsidies are based on prior years income... which was $80k. But now that he has zero income he gets nothing. But next year, he could technically qualify for subsidies if his income this year was low enough... but then the IRS would take those subsidies back after he reports income over 400%FPL for that year. Did I get that straight? Is there some kind of subsidy exemption I don't know of if you just lost your job?
