Unfortunately, it is inevitable that you or someone you know will be affected by a chronic condition. According to the Centers for Disease Control, six in ten adults have at least one chronic disease, and four in ten adults have two or more. If you have a family history of chronic diseases, your chances of developing one yourself are even higher. With Heart Attack, Cancer, and Stroke being the top 3 leading causes of death, Critical Illness policies are becoming more popular.
Now, how exactly do these plans work? Critical Illness plans pay money directly to the beneficiary to use if the insured is diagnosed with a covered chronic condition. In most states, they are available to anyone age 18-89 who meet certain health criteria. Health insurance is a great tool to offset medical costs, but realistically, it does not cover everything- utility bills, doctor copays, mortgage, travel expenses, prescription drugs etc. can pile up quickly. Having the flexibility to use your plan’s payout money as you see fit is one of the key benefits of a Critical Illness policy.
Here are some ways this coverage can work with a Medicare Advantage Plan:
1. It can help pay copays and coinsurances that count towards the Maximum Out of Pocket Limit, which in some HMO plans can be up to $7,550 for the year, or up to $11,300 with a PPO plan!
2. Medicare Part B medications such as chemotherapy drugs that are administered through your vein in an outpatient clinic or a doctor’s office. Or some oral chemotherapy treatments. These treatments generally have a 20% coinsurance and can cost hundreds, if not thousands per month. If you reach the Donut Hole (Coverage Gap) you will be paying 25% of the cost of those drugs until you reach Catastrophic Coverage.
3. These plans can help cover costs incurred at facilities or doctors not covered under your Advantage plan’s network, so you will not have to limit yourself on who you are able to see.
Here are some ways this coverage can work with a Medicare Supplement Plan:
1. Unless you live near a renowned Cancer institute, you may wind up traveling out of state for treatment. This can help pay for Hotels, Rental Cars, Airfare, etc.
2. Experimental Treatments are not covered by Medicare, and you would be responsible for 100% of those costs.
3. It can also help supplement income lost because of your medical emergency.
From choosing a reputable doctor to arranging transportation to different facilities, navigating through a health crisis for yourself or a loved one can be challenging. Critical Illness plans help lessen the financial burden so you can focus on what is most important. Still, some may wonder why purchase additional insurance if they already have Medicare.
Let us use Mr. Smith as an example: Mr. Smith purchases a Cancer, Heart Attack and Stroke policy from Company ABC with a benefit payout amount of $10,000 to be paid if he were to be diagnosed with any of these conditions. Three months later, Mr. Smith is diagnosed by his primary doctor with Cancer and submits a claim to Company ABC. Company ABC then pays out the $10,000 lump sum to Mr. Smith’s wife, who he has named as his beneficiary. She then uses the funds to arrange for transportation to a prominent Cancer facility which is out-of-state. She also uses the funds to help pay their mortgage and utilities while they are traveling and fly out family members who want to show their support for him during this time.
As you can see, Critical Illness polices are a safety net for the consumer, should they be diagnosed with a chronic health condition. The payout money can be used however they wish, leaving the policy holder with the freedom to choose how they will receive care. This can be especially helpful if your plan has limitations like a provider network, you need to travel to receive care, or miss out on income you would have received otherwise. These policies can help provide some financial peace of mind while you focus on getting the care you need.