The last thing someone should have to think about when diagnosed with cancer, a heart condition or other critical illness is how they are going to pay their bills. Yet, many people are not prepared to cover unexpected medical expenses.
Prior to the pandemic, 64% of adults said they would have to dig into their savings or use credit to pay for a $400 unexpected bill. By July 2020, that number rose to 70%.1 The American Cancer Society estimates that cancer patients with health insurance could pay up to $12,000 out-of-pocket for their care.2
The continued high cost of health care, the rise of high deductible health plans and the COVID-19 pandemic have shed a spotlight on the growing importance of supplemental health insurance such as critical illness, accident and hospital indemnity insurance plans. These employee benefits can help pay for deductibles or living expenses such as a mortgage.
The pandemic has also led many employers to implement new programs and benefits to help take care of their workforce and that are robust and relevant for our time. The Hartford’s 2021 Future of Benefits Study found that 29% of employers added critical illness insurance as a benefit and 84% of those added it due to COVID-19. The study also showed that of the 46% of workers who chose critical illness insurance during benefits enrollment, 35% chose it for the first time.
Laura Bongiorno, head of voluntary, technology and specialty sales for Group Benefits at The Hartford, said supplemental health benefits have shifted from a “nice to have” to a “must have.”
“Employees may have overlooked these supplemental benefits in the past, but there is a heightened awareness now because of what we’ve all been through the past two years,” Bongiorno says.
Here are some things to look for when considering critical illness coverage:
- Infectious disease coverage: COVID-19 is a persistent part of our everyday lives. Employers may have skimmed over infectious disease coverage as part of a critical illness policy in the past, but as the pandemic continues to impact our lives, they are now zeroing in to see if COVID-19 and other infectious diseases and conditions are covered under the policy
- Severity-based benefits: Each year, 1.6 million people are diagnosed with cancer and about 800,000 people each year suffer strokes and heart attacks.3 All three account for most critical illness insurance claims. Many critical illness policies provide coverage for just the most severe conditions, but some plans will pay cash benefits across a range of severities and stages for these conditions.
- Protection for every stage of life: The average age when someone files a claim for critical illness is between the ages of 43-56. Of course, illness can happen at any age to any member of the family. Some critical illness plans cover a range of conditions starting at birth:
- Birth to Childhood – Congenital heart defect, genetic disorders, cerebral palsy, autism spectrum disorder and Type 1 diabetes
- Mid-Life – Cancer, heart attack, stroke, mental health disorders and a broad range of infectious diseases
- Older Employees – Parkinson’s disease, Huntington’s disease, and other chronic/progressive and neurological conditions, including dementia, Alzheimer’s disease, multiple sclerosis (MS), amyotrophic lateral sclerosis (ALS)
1 Federal Reserve Report on Economic Well-Being of U.S. Households – May 2021
2 American Cancer Society: How Much Does Cancer Cost, October 2020
3 Centers for Disease Control and Prevention: Cancer, Stroke, Heart Attack Facts, reviewed February 3, 2022