How to handle gaps in health insurance coverage


The financial impact from uncovered health-care expenses can be a shock and even affect a person’s financial wellness. But there are ways to alleviate the stress.

Let’s create a scenario. Elizabeth is a single mom with two children. She was at home when she suddenly experienced troubling symptoms that turned out to be a heart attack. She had surgery, was hospitalized and was out of work for months with no pay. That’s a very expensive scenario all around.

Hospitalization for a heart attack could run from around $6,500 to nearly $21,000, according to the Healthcare Bluebook. Fortunately, Elizabeth had purchased two types of voluntary benefits through her employer — critical illness insurance and hospital confinement indemnity insurance.

Having these benefits helped reduce her stress, allowing her to focus on her own recovery. Through this coverage, she received lump-sum benefit payments that she was free to use as she chose. The benefits helped her cover mortgage payments, groceries, utilities and child care, as well as some of her out-of-pocket medical costs.

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Anyone can be injured or become sick unexpectedly. Accidents, sports injuries and diagnoses of serious illnesses are common, and the costs can add up. An average family has more than $4,500 in out-of-pocket medical costs each year, according to 2017 Milliman’s Medical Index.

Many people can’t absorb that cost. A recent study by the Urban Institute found that 4 in 10 Americans are struggling to pay for basic needs, such as groceries or housing. Unexpected costs can compound that and also derail retirement planning.

Your company’s annual benefits open-enrollment period is a good time to consider additional benefits to help you cover the gaps in health insurance coverage.

Workers can cover themselves, and possibly even their spouse and children, if eligible, and it is usually far less expensive than most would expect. In addition to critical illness and hospital confinement indemnity insurance, other common benefits your employer might offer include accident insurance — which typically covers common injuries, such as fractures, lacerations and concussions — and disability insurance.

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