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8/6/2019 Business Owner Major Medical Comparison 2
http://slidepdf.com/reader/full/business-owner-major-medical-comparison-2 1/17
Major Medical Cost Comparison
8/6/2019 Business Owner Major Medical Comparison 2
http://slidepdf.com/reader/full/business-owner-major-medical-comparison-2 2/17
Insurance Commissioner Reveals Shocking Truth
That Americans are Paying Thousands Of DollarsToo Much For Their Health Insurance & What You
Can Do About It
• Would you like to learn what Insurance
Companies “Don’t” want you to know?
8/6/2019 Business Owner Major Medical Comparison 2
http://slidepdf.com/reader/full/business-owner-major-medical-comparison-2 3/17
We Call It Insurance, but That's Not Healthy(By Lawrence H. Mirel - Commissioner of Insurance and Securities, Washington, D.C.)
• “The current system for paying the costs of health care isseriously flawed, because insurance is the wrong model --at least for part of the system.”
• “The general definition of an "insurable event" -- from
traffic accidents to tornadoes -- is something that :”
• First: is very unlikely to happen;
• Second: will come without warning; and
•
Third: is not something the person who is insured ever wants to happen.
(Excerpts From a Washington Post Article – 2001)
8/6/2019 Business Owner Major Medical Comparison 2
http://slidepdf.com/reader/full/business-owner-major-medical-comparison-2 4/17
8/6/2019 Business Owner Major Medical Comparison 2
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Two Different Tiers Of HealthCare
• To begin with, we must recognize that we are dealing with twodifferent tiers of health-care needs and must cover those needswith two separate tiers of payment.
• One tier is catastrophic illness -- and for that tier, insurance is theanswer
• The second tier comprises health maintenance and routinemedical procedures. For this tier, insurance is not the answer.Instead, I see other options: One is for people to pay these costs
out of pocket, the way we now pay for many other routineneeds, such as car and home maintenance.
8/6/2019 Business Owner Major Medical Comparison 2
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Cost Analysis Major Medical
(Blue Cross, Blue Shield Of Texas)
www.bcbstx.com
John and Mary (Ages 51/48) - April 2011 (Houston, TX)
PPO Select Choice (Comprehensive Coverage)
$1,000 Deductible (80/20 Co-insurance)
__________________
$970.00 Per Month
8/6/2019 Business Owner Major Medical Comparison 2
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Cost Analysis Year by Year
(Comprehensive Coverage - $970 per month)
$970 x 6 months premiums = $5,820
$25 co-pay to the Doctor, would have cost us $5,820 + $25
1 year Of Premiums = $11,640.00
10 years = $116,400 to $150,000 (with yearly rate increases)
20 years = $300,000 to $400,000 (with yearly rate increases)
8/6/2019 Business Owner Major Medical Comparison 2
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Catastrophic Coverage
Blue Cross Blue Shield of Texas
Hospitalization Only Insurance Plan
$10,000 Deductible (with Co-Ins)
Monthly payments (For John and Mary)
$325.00 a Month
8/6/2019 Business Owner Major Medical Comparison 2
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10 Year Cost Comparison with a $40,000
Hospital Bill
• Option A- Comprehensive Health Insurance
• 10 years Premiums + $1,000 Deductible + $3,000 Co-ins for a
$40,000 Hospital Bill =
$154,000 (Approx.)
8/6/2019 Business Owner Major Medical Comparison 2
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Same 10 Year Cost Comparison
Hi-Deductible Plan
• Option B - $10,000 Deductible Plan (Hospitalization)
• 10 years Premiums ($40,000)+ $10,000 Deductible + $3,000
Co-ins and the same $40,000 Hospital Bill =
$53,000
8/6/2019 Business Owner Major Medical Comparison 2
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Section 125 Cafeteria Plans
Here, an employer-based system could beuseful, but not a system that tries to insureroutine health care. Instead, employers andemployees might be asked to put money intoindividual “Flexible Savings Accounts“ and/or“Health Re-imbursement Arrangements” for
employees.
8/6/2019 Business Owner Major Medical Comparison 2
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AWIS Including Hospital Patient Advocacy
• Option C
AWIS and Catastrophic Insurance
Add a “Section 125” FSA and/or HRA to
offset the deductible for Employees
8/6/2019 Business Owner Major Medical Comparison 2
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Conclusion
• Same $40,000 Hospital Bill
• Over a Ten Year Time Frame with premiums
Which would you prefer? • Option A---- $154,000 Total Cost
• Option B---- $53,000 Total Cost
• Option C---- AWIS & PAC and Option B
8/6/2019 Business Owner Major Medical Comparison 2
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Sensible Options
• Use Catastrophic Hi-Deductible Major Insurance
Plans for the Big Medical Bills
• Use AWIS with plans around $119-$219 a month (for an entire Family) for the small Medical bills,
(Doctor visits, Blood or lab work, Prescription meds,
X-rays, MRI’s, Cat Scans, Dental Services, Eye-Glasses, etc..)
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Example: AWIS Plan Cost $119-$219 a month for a Family:
$10,000 Accident, $10,000 Critical Illness, and more
• Catastrophic Insurance and an Awis plan would save you
anywhere from $250 to $700 a month.
• If put aside into a monthly savings account, it could grow from
$100,000 to over $200,000 over a 10 - 20 year time frame.
•
Do you want the Insurance company to keep this, or would you rather keep it in your bank account?
15
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Requirements for a Proposal
1. A company census of all employees, age,single, married, children, for a group quote
on a Hi-Deductible Major Medical Insurance
Plan within 3-5 business days.
2. An AWIS Plan will be added to help offset the
insurance deductible.
3. (Optional)- Set up a Section 125 plan. This
can be a FSA, HRA or both.