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High-Deductible Worries? Supplemental Health Insurance Can Add an Extra Layer of Security

High-Deductible Worries? Supplemental Health Insurance Can Add an Extra Layer of Security

High-deductible health plans (HDHPs) have become increasingly prevalent in recent years and for many good reasons. These plans often appeal to individuals living in rural areas, farmers and self-employed business owners, and private sector workers who are seeking a balance between quality healthcare coverage and cost management.

However, the rising cost of healthcare and the ever-increasing deductibles associated with HDHPs can leave hard-working people with unexpected medical expenses that put stress on their livelihoods. In the event of a common critical illness such as cancer, for instance, the high out-of-pocket costs can be overwhelming and adversely affect a family’s financial stability.

Supplemental health insurance can address these challenges and play a vital role in providing additional, affordable coverage and peace of mind. In this article, we’ll explore HDHPs and how a supplemental policy with benefits for critical illness, accident or hospital indemnity can help bridge the gaps left by primary high-deductible health plans.

Understanding High-Deductible Health Plans (HDHPs)

High-deductible health plans, commonly known as HDHPs, are healthcare insurance plans with higher deductibles and lower monthly premiums compared to traditional health insurance plans. These plans require individuals to pay more out of pocket for their healthcare expenses before their insurance coverage kicks in.

The main principle behind HDHPs is to encourage individuals to take more responsibility for their healthcare choices and expenses. By having a higher deductible, individuals are incentivized to make more cost-conscious decisions when seeking medical care. According to 2023 IRS guidelines, HDHPs have a deductible of at least $1,500 for individuals and $3,000 for families.

While HDHPs can offer lower monthly premiums, there are benefits and drawbacks to consider, particularly in rural and self-employed settings.

Pros: On the one hand, HDHPs can be an affordable option for individuals and small business owners with limited financial resources. They provide essential coverage for preventive care services and can include tax-advantaged Health Savings Accounts (HSAs), allowing individuals to save for future medical expenses.

Cons: However, HDHPs also come with potential financial risks, especially for those facing limited access to healthcare services or who have unpredictable medical needs. In the event of a serious illness or accident, the financial burden of meeting the high deductible and covering out-of-pocket expenses can be overwhelming.

The Rural Reality: Why High-Deductible Plans Are Common

As healthcare costs have continued to rise, HDHPs have become more common than ever. More than half of private-sector workers in the U.S. were enrolled in an HDHP in 2021.

In rural communities, the time and travel required to visit the nearest hospital or specialized clinic can be considerable. As a result, residents of these areas often restrict their medical visits to essential needs only. The limited availability of healthcare facilities, combined with affordability concerns, contributes significantly to the prevalence of high-deductible plans in rural regions.

A Financial Safety Net: Supplemental Health Insurance

Supplemental health insurance is often designed to cover the gaps left by primary health insurance plans, providing additional financial protection and peace of mind during a health crisis.

A supplemental health insurance policy is generally purchased in addition to traditional health insurance and provides financial benefits to cover deductibles, co-pays and other out-of-pocket expenses. This can help alleviate the financial burden and prevent potential setbacks, especially for individuals who are responsible for high deductibles or cost sharing.

There are many types of supplemental health insurance options. Here are a few common options:

1. Cancer or Critical Illness Insurance

  • Provides a lump-sum payment upon the diagnosis of a covered critical illness, such as cancer, heart attack or stroke.
  • Offers financial benefits for medical treatments, non-medical expenses and loss of income during recovery.

2. Accident Insurance

  • Covers expenses related to accidents, including emergency room visits, hospital stays, surgeries and follow-up care.
  • Helps fill the gaps left by high-deductible health plans by providing financial assistance for unexpected injuries.

3. Hospital Indemnity Insurance

  • Provides daily, weekly or monthly cash benefits when the policyholder is hospitalized due to illness or injury.
  • Helps cover hospitalization costs and allows policyholders to use the benefit as needed, such as for deductibles or non-medical expenses.

Platinum Specializes in Supplemental Health Options for Rural Americans

For over two decades, Platinum Supplemental Insurance has been customizing supplemental coverage options to meet the specific needs of rural Americans. Most people know that critical illnesses like cancer are common. But most people don’t have the time or desire to think about how they’ll be impacted by out-of-pocket costs if they personally experience a serious illness.

That’s why Platinum designs policies with large lump-sum benefits to help families address some of the most common and financially disruptive health events. Here’s a look at a few key benefits:

  • Lump-sum cash benefits paid directly to you in the wake of a covered cancer diagnosis, or heart attack or stroke event.
  • Lump-sum cash benefits paid in the event you or a covered individual experiences an accidental death or dismemberment.
  • Coverage for chemo, radiation and supportive drugs.
  • Coverage for experimental cancer treatment.
  • Benefits for hospital confinement and transportation costs.
  • Chronic disease benefits for Alzheimer’s, Parkinson’s and more.

If you’re ever faced with a serious illness or accident, the last thing you want weighing on your mind is how you’ll pay for the best care. Supplemental health insurance can be a secure safety net for the high out-of-pocket expenses left by primary insurance coverage. This peace of mind allows individuals, especially those with high-deductible plans, to choose the highest quality care and focus on their health and well-being without the constant worry of medical bills piling up.

Questions? Let Us Know How We Can Help

If you would like to discuss a new or existing policy, or have questions about increasing your coverage, our friendly, knowledgeable customer service team is on standby to help.

Do you know someone who could benefit from our supplemental health policies? Have them request a quote.