How Critical Illness Insurance Can Help With Medicare Advantage Medical Bills

https://www.youtube.com/watch?v=XevW-y2RvuQ

Summary:

• Many Medicare Advantage enrollees can face high medical bills when facing severe illnesses like cancer and heart disease

• This is often because many Medicare Advantage plans have annual out-of-pocket maxes of between $6,000-$10,000

• Critical Illness insurance policies can be a cost-effective way to help combat these large bills

• You often must enroll in critical illness insurance BEFORE a major illness happens to qualify for a policy

What You May Not Know About Your Medicare Advantage Plan

During Medicare Annual Enrollment, we had many new prospective clients come into our office and mention that they had around $10,000 in medical bills from cancer treatments. Unfortunately, we couldn't retroactively fix this high bill.  

In this article we are going to talk about what type of insurance policy these people had that caused them to accrue so many bills, why they couldn't change their situation, and most importantly, how a lesser known policy called critical illness insurance may help people potentially avoid this situation in the future.

As a team, NJ Life and Health has helped over 4900 NJ residents with their Medicare, and we are now looking forward to hopefully helping you with this article! 

What Type of Medicare Plan Led to This Situation?

The new clients that walked into our office with $10,000 in medical bills were often enrolled in Medicare Advantage plans. Medicare Advantage plans are a private equivalent to Original Medicare. While there are some major perks, they do run on a pay-as-you go structure. This means that you usually have a low monthly premium, but you pay for different medical procedures and needs as they come up.  

Most of the Medicare Advantage policies in New Jersey have out-of-pocket maximums that range from around $6,000 to $10,000 a year. These Medicare enrollees were hitting their out-of-pocket maximum due to their severe health issues. Conditions like cancer, a heart attack, or other ailments can quickly lead to large, unexpected medical bills.

Many people have great experiences with Medicare Advantage plans, but any insurance plan has risks. As licensed health insurance brokers, the out-of-pocket costs with these MA plans are one risk we do our best to make sure our clients are aware of.

Note that the out-of-pocket maximum varies greatly depending on your state, zip code, and specific plan. For instance, many retiree Medicare Advantage plans can have lower out-of-pocket maximums. 

What Is Critical Illness Insurance and How Can It Help?

Critical Illness insurance policies may be one option to help manage these large medical bills.

Critical Illness Insurance is a type of insurance designed to protect you against the high costs of diseases like cancer and heart disease. These policies are simple. You take out a policy for about $15-45 a month that will pay on average $5,000-$15,000 if you get a specific illness. In most cases, a cancer policy costs about $25 a month for an older adult and will give you $10,000 towards your cancer bills. 

Note: Premiums and benefit amounts vary by carrier, plan, age, and state.

If you remember from earlier, we mentioned many NJ Medicare Advantage plans had out-of-pocket maxes of around $6,000 to $10,000 depending on the plan you've chosen. If you were to be diagnosed with cancer, you could potentially use a cancer policy you enrolled in to help pay for a year of your out-of-pocket cancer treatment costs.

Who Qualifies for a Critical Illness Insurance Policy?

In most cases, you need to have not had cancer or a heart attack for 5-10 years to qualify for these policies. The underwriting standards aren’t as high as other types of insurance policies, you usually just need to have not had these major medical issues recently.

You also need to show you have comprehensive medical coverage. And a Medicare Advantage plan fits this bill well.

Again, getting this kind of policy BEFORE a major health condition develops is key. You also can sign up for these plans at any time of year. You don’t have to wait for any enrollment period to sign up.

How does a Critical Illness Policy work? 

Once you open one of these policies, the result is simple. If you get the illness you were looking to have covered, you should get the full benefit amount of the policy. If you signed up for a cancer policy, and you get diagnosed with cancer, you will be able to claim your benefit amount.

It works a lot more like a life insurance policy than a health insurance policy. You can even set up beneficiaries to get the benefit if you are not able to claim it due to your passing.  

Summary and How To Enroll

We hope you take away from this article the idea that the time to consider a critical illness insurance policy is before a diagnosis, not after. A policy that costs around $25 a month could potentially save you thousands in out-of-pocket costs when you need it most.

You can enroll in a critical illness policy by calling an insurance carrier directly, but we’d recommend calling a health insurance broker if you are interested in this kind of policy. Health insurance brokers can compare across multiple insurance carriers to help find a policy suited for your needs.

If you’d like our help, reach out to NJ Life and Health at 848-226-6897 to dive into your options. We are licensed in over 20 states and happy to help you decide if this kind of policy is right for you. You can also visit our website at www.njlifeandhealth.com 

If you have any topics you’d like us to cover, leave us a comment below! And share this blog post with anyone who you think could use this help.

Ken Connolly is the author of this post. He is a licensed health insurance broker in several states and has personally helped over 450 people with their Medicare.