Critical Illness Insurance: A Valuable Offering for Practices

Critical illnes insurance is finding increasing popularity as it pays for the big out-of-pocket expenses anyone who has a critical illness will incur despite the best health insurance.

And critical illnesses are, almost by definition, damnably expensive. Met Life did a study and found that someone who suffers a critical illness will eat up about $12,000 above and beyond what’s covered by health insurance — just in the first year!

It’s a simple fact that health insurance is making employees pay more and more of the initial costs — deductibles edge higher and higher by the year. What’s more, co-insurance is beginning to catch on.

So, many doctors and employees may face a $2,000 deductible and then pay 20% co-insurance to a maximum out-of-pocket cost of $5,000 — that is, an additional $3,000 via co-insurance payments of 20%.

It’s not just deductibles and co-insurance that eat extra dollars. It’s time off work, transportation costs for treatment, childcare during treatment, home adaptations to allow for special needs generated by the illness. It’s serious stuff … and expensive.

Five most common critical illnesses

The big five, in order of frequency of occasion, are:

1. Heart attack

More common than you think, heart attacks hit one million people a year in the U.S., and one-in-three Americans has a coronary disease of some type. We’re suffering an epidemic of obesity, high blood pressure and high cholesterol, all contributing factors.

2. Cancer

According to Colonial Life, a major insurer in the cancer insurance arena, cancer is responsible for 27% of critical illness claims. It strikes, after all, one-third of U.S. women and one-half of U.S. men at some time in their lives.

Cancer, more so than heart attacks, causes higher-than-expected medical costs because of the frequent necessity of long, arduous treatment regimens that drag on for months.

3. Kidney failure

In addition to the aforementioned epidemics of high cholesterol, obesity and blood pressure, there is a huge epidemic of diabetes (tied, in large part, to the obesity problem). And diabetes — diagnosed or undiagnosed — poses a serious risk of kidney failure.

Sadly, a new study by the National Kidney Foundation finds that many doctors aren’t diagnosing kidney disease early enough.

4. Stroke

A sudden loss of blood flow and oxygen to the brain, it results in 133,000 deaths a year and is a major cause of adult disabilities. There are more than seven million adult stroke survivors in the United States.

5. Coronary artery bypass surgery

Done to relieve angina and to lower the risk of death from coronary artery disease, this procedure is booming, and the number of such surgeries grows every year. Again, it often results in significant uninsured medical costs.

A zero-cost solution for medical practices

While critical illnesses pose serious potential financial problems for physicians and other health care workers, most medical practices feel it’s not their responsibility to address those risks for them. However, at no cost to the practice, you can give employees the opportunity to address those risks on their own. Those who choose to do so can purchase a critical illness policy via salary withholding; those who aren’t concerned can choose to do nothing. The problem and the solution are no longer your concern.

The policy spells out specific amounts of money that will be paid immediately upon diagnosis of the specific critical illness. Only one claim form, filed one time. The benefit is both helpful and timely.

Most employees actually are serious about maintaining both their heath and economic wellbeing. They welcome the opportunity to address their needs via their place of employment.

The days of the kitchen-table insurance sales representative are long gone. People don’t have the time at night to get an analysis of their needs done so that they can purchase appropriate protection.

Today, that need is addressed at the worksite — and 21st century employers recognize that employees appreciate access to benefits they pay for almost as much as they appreciate employer-sponsored benefits. By offering a workplace that allows them to intelligently address and plan for their needs, you can build a more productive, happier workplace.

Jim Edholm is President and founder of BBI Benefits of Andover, Mass. BBI has been guiding Massachusetts employers to cost-effective benefit selection and design for more than a quarter century. BBI’s guide, “How Attorneys Can Lower Healthcare Costs, Maintain Benefits and Put Cash in Employees’ and Partners’ Hands” is available by emailing Jim at JimEd@bbibenefits.com or calling (978) 474-4730.