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Supplemental Medical Insurance: Know Your Odds and How Much It May Cost You

These supplemental medical plans are an affordable option for eligible members to help guard against the high out-of-pocket costs of health care.

BY TOM KACIREK

You’ve likely purchased high-quality health insurance and feel you have the income and savings necessary to cover any out-of-pocket costs. But statistics show that the cost of inpatient and outpatient medical care in most states continues to rise, which means your share of the total cost could end up being much greater than you are prepared for. Have you ever considered supplemental coverage?

Supplemental medical insurance can be an affordable way to help protect you and your family and safeguard against having to deplete your savings account, a college fund or retirement savings to pay your share of an expensive hospitalization or related medical bill. Consider the value of this coverage; it might make you feel better long before the bills arrive.

Even for a short stay, hospital costs add up fast
The risk of hospitalization is more likely than most of us realize. Each year, 7 percent of Americans will have to stay at least one night in a hospital,¹ and the likelihood doubles with age — to more than 15 percent over age 65 years.² And, the average cost of a three-day hospital stay is $30,000³ or higher depending on what state you live in.

A supplemental medical insurance product like ADA Hospital Indemnity Insurance, issued by Protective Life, can help offset your out-of-pocket costs in the event of a hospital stay, visit to the emergency room or outpatient care services for a qualifying treatment such as chemotherapy. These hospital cash benefits are paid directly to you to use at your discretion, which makes it flexible. And, this coverage is competitive for ADA members who benefit from group rates. For example, for less than a $600 annual premium, an ADA member age 50 years could apply for up to $1,000 daily cash benefits.

Critical illness and your costs Hospital costs for minor illnesses or injuries cannot compare to the staggering financial burden of critical illnesses like cancer, heart attack or stroke. These critical illnesses can happen to otherwise healthy people, and statistics show that each year there will be over 1.7 million new cancer cases in the United States⁴ and someone in the United States has a stroke every 40 seconds.⁵

Unfortunately, the related costs to care for a family member with a critical illness can be as catastrophic as the diagnosis if you’re not properly insured and financially prepared. What if your spouse had to quit his or her job to be a full-time caregiver? What if you needed to pay for in-home health care, pay to renovate your living space to be disability accessible, or travel to a faraway hospital or specialized treatment facility for medical care or rehabilitation? These life-changing events often happen with little warning and at times when ready cash or personal savings are not enough to cover the costs.

ADA Critical Illness Insurance issued by Protective Life, can help ease this financial stress by providing up to $50,000 in a lump sum payment upon first diagnosis of one of 17 covered critical illnesses, including stroke and cancer. And, similar to hospital indemnity benefits, the payment is made directly to you. This important supplemental medical coverage can help fill the gaps of your primary health insurance and provide a sense of financial protection when you and your family need it the most. And, you may be surprised at how competitively priced it is for eligible ADA members. Take for example, a $50,000 lump sum critical illness benefit at age 50 years under the ADA group rates would only cost approximately $500 for the year.

The cost of an extended medical care journey
Critical illnesses often require extensive, costly health care services over an extended period of time. They can include medical care in a skilled nursing facility, rehabilitation center or nursing home after an extended hospitalization – and the related costs can reach exorbitant levels. For example, a private room in a nursing home costs an average of $7,698 per month, and a one-bedroom unit in an assisted living facility averages $3,628 per month.6 How will you pay the costs of these types of extended health care?

The ADA Hospital Indemnity Insurance offers an optional Extended Care Rider that can help offset the out-of-pocket costs of extended recovery care after a hospitalization. This rider can provide daily benefits of up to $250 per day for up to 200 days to help address costs such as home health care, skilled nursing, and nursing home expenses.

That same 50-year-old member would pay only $44+ that year for this additional coverage.

ADA member value
Health issues are difficult enough to cope with, not to mention the financial burden of paying for them long after the diagnosis. The ADA supplemental medical plans, issued by Protective Life, are an affordable option for eligible members to help guard against the high out-of-pocket costs of health care.

Mr. Kacirek, FSA (fellow of the Society of Actuaries), MAAA (member of the American Academy of Actuaries) is vice president, Specialty Insurance Markets for Protective Life.
Kacirek T. Supplemental medical insurance: Know your odds and how much it may cost you. Posted online July 23, 2018 at https://success.ada.org/en/practice-management/dental-practice-success/dps-summer-2018/know-your-odds-and-how-much-it-may-cost-you. Copyright ©2018 American Dental Association. All rights reserved. Reproduced with permission.
Resources:
¹ Centers for Disease Control and Prevention, National Center for Health Statistics. Hospital utilization (in non-federal short-stay hospitals). Available at https://www.cdc.gov/nchs/fastats/hospital.htm. Accessed June 11, 2018.
² Centers for Disease Control and Prevention, Summary Health Statistics: National Health Interview Survey, 2016—Table P-10a. Age-adjusted percent distribution (with standard errors) of number of overnight hospital stays during the past 12 months, by selected characteristics: United States, 2016. Available at: https://ftp.cdc.gov/pub/Health_Statistics/NCHS/NHIS/SHS/2016_SHS_Table_P-10.pdf. Accessed June 11, 2018.
³ HealthCare.gov. Why heath insurance is important: protection from high medical costs. Available at: https://www.healthcare.gov/why-coverage-is-important/protection-from-high-medical-costs/. Accessed June 11, 2018.
⁴ American Cancer Society, Cancer Facts & Figures 2018. Available at: https://www.cancer.org/research/cancer-facts-statistics/all-cancer-facts-figures/cancer-facts-figures-2018.html. Accessed June 11, 2018.
⁵ Centers for Disease Control and Prevention, Stroke: stroke facts—stroke statistics. Available at. https://www.cdc.gov/stroke/facts.htm. Accessed June 11, 2018.
⁶ U.S. Department of Health and Human Services, Long-term Care gov. Costs of care. Available at https://longtermcare.acl.gov/costs-how-to-pay/costs-of-care.html. Accessed June 11, 2018.
Critical Illness Insurance Plan claims are not payable for any confinement or treatment resulting from a condition for which the insured received any medical treatment, care, advice or medication within 12 consecutive months before the effective date of this insurance and applicable to any insurance increases.
Critical Illness Insurance Plan is guaranteed issue for coverage at $5,000 and less, meaning approval is guaranteed without any medical or financial underwriting. Benefits from $10,000 to the maximum of $50,000 ($5,000 minimum incremental increase) are subject to underwriting approval.
Hospital Indemnity Insurance Plan claims are not payable for any confinement or treatment resulting from a condition for which the insured received any medical treatment, care, advice, or medication within 12 consecutive months before the effective date of this insurance and applicable to any insurance increases.
Benefits for confinement in a Skilled Nursing Facility or Nursing Home will be payable only if such post-hospital confinement begins within seven days after at least three consecutive days of confinement in a hospital. Beginning at age 65, benefit amounts can no longer be increased, but coverage is renewable up to age 90. At age 70, Hospital Indemnity Insurance Plan coverage is $200 per day for all participants.
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Supplemental Medical Insurance: Know Your Odds and How Much It May Cost You

These supplemental medical plans are an affordable option for eligible members to help guard against the high out-of-pocket costs of health care.

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