Paying down a high deductible after an accident in Florida

If your health plan has a high deductible, an accident can cost you a lot before the plan pays much. A fall, a broken bone or a trip in an ambulance can add up to thousands of dollars that are yours to pay until the deductible is met, and then there is your share of costs after it.

Some people in Florida add an accident plan to help with that part. Accident ExpenseGuard is an accident plan underwritten by Golden Rule Insurance Company, a UnitedHealthcare company. After a covered accident, it pays cash based on the actual charges for your care. It pays regardless of other coverage, so what your health plan pays does not change it. The money comes to you, and you can put it toward your deductible or anything else.

Here are two examples set in Florida. The people are fictional. The plan details come from the carrier’s brochure.

The rules behind every payment

You choose a level. The accidental injury benefit can be $5,000, $7,500, $10,000, $15,000 or $20,000. That is the most the plan pays for each covered person per calendar year, and it starts over every year. The plan also includes an accidental death and dismemberment (AD&D) benefit equal to the level you choose, as a lifetime maximum.

There is a small deductible of its own. The plan’s deductible is $250 per covered person per calendar year, with up to two per family per calendar year. It has nothing to do with your health plan’s deductible.

Your health plan’s EOB sets the charges. You send a claim form with the Explanation of Benefits (EOB) from your health plan. The plan uses it to find the actual charges after your health plan’s adjustments, discounts or allowances. Without an EOB, the plan uses Reasonable and Customary charges, which the policy bases on the most common charge for similar services in the area.

The payment is charges, minus $250, up to your level.

Care has to happen in time. Within 48 hours of the accident: burns or lacerations, a diagnosed concussion, an emergency room visit or an urgent care center visit. Within 30 days: ambulance, labs and X-rays, anesthesia, MRI or CT scan, doctor visits, prescriptions, fractures, prosthetics, a hospital stay or ICU, and surgery.

A fall by the pool in Port Charlotte

Margie Hollis is 63 and lives on her own in a condo in Port Charlotte. She retired at 62 after 30 years as a school librarian, and since then she has bought her own health insurance. To keep the premium down, she chose a plan with an $8,000 deductible, 20% coinsurance after that and a $9,100 out-of-pocket maximum.

That $9,100 was the number that kept her up at night. Her savings had to last. So at 62 she applied for Accident ExpenseGuard, for herself only, and chose the $10,000 level. She chose it because it was a little more than her plan’s out-of-pocket maximum.

She applied in time. The primary insured must be 18 to 64 at the time of application. The policy is renewable until the primary insured’s 70th birthday, subject to its terms, such as paying premiums when due.

The fall. On a morning in March, Margie walked down to the community pool. The deck had just been hosed off. Her sandal slid, and she landed hard on her right hip. She could not get up. A neighbor called 911, and an ambulance took her to the hospital in Port Charlotte.

X-rays and a CT scan showed a broken hip. She had surgery the next morning, under anesthesia, and spent three days in the hospital. She went home with prescriptions and a walker. She saw the surgeon twice, on days 14 and 28.

Between the hospital and home, she spent ten days at an inpatient rehabilitation facility.

Matching the care to the time limits. Her ER visit was the same morning, inside 48 hours. The ambulance, imaging, surgery, anesthesia, hospital stay, prescriptions and both follow-up visits were inside 30 days.

The charges. Her sister gave notice of the claim while Margie was still in the hospital. The policy asks for notice within 30 days of the date the loss began, or as soon as reasonably possible. Here is what the EOBs showed as actual charges after adjustments:

• Ambulance: $1,250
• Emergency room visit: $1,900
• X-rays and CT scan: $1,450
• Surgery: $14,200
• Anesthesia: $1,800
• Three-day hospital stay: $12,600
• Prescriptions: $85
• Two follow-up visits at $175 each: $350

Total actual charges after adjustments: $33,635.

The payment, step by step.

Step 1. Start with the actual charges: $33,635.

Step 2. Subtract the $250 deductible: $33,635 minus $250 is $33,385.

Step 3. Apply the maximum. Margie’s level is $10,000 per calendar year. $33,385 is far more than that, so the payment stops at $10,000.

Accident ExpenseGuard paid $10,000, directly to Margie.

Where the money went. On her health plan, Margie owed the first $8,000. After that, 20% of the remaining $25,635 would have been $5,127, which would have brought her share to $13,127. Her out-of-pocket maximum stopped it at $9,100.

The $10,000 covered that $9,100, with $900 left. She spent it on her walker, rides to her follow-up visits and grocery delivery for the weeks she could not drive. Her rehab stay went through her health plan, and because she had already reached her out-of-pocket maximum, it added nothing to what she owed that year.

What the plan did not pay.

• The $23,385 above her maximum ($33,385 minus $10,000). Her health plan handled its share of that under its own terms. Margie has no injury benefit left for that calendar year, and it starts over in January.
• Her walker. The policy excludes durable medical equipment. She bought it with her own payment, but the plan did not pay for it on top.
• Her stay at the rehabilitation facility. It is not on the brochure’s list of covered services, so this example does not count it. If you are weighing this plan, ask how the policy treats care like that.
• Her AD&D benefit was not involved. It applies only to accidental death or the specific losses the policy lists, and a broken hip is not one of them.

The policy says premiums will not change solely because of claims made by a covered person or a change in a covered person’s health.

A bike crash in St. Petersburg

Kenji Alvarez is 26 and works as a freelance graphic designer in St. Petersburg. He rides his bike almost everywhere. He buys his own health insurance, a plan with a $9,200 deductible. In most years he never comes close to it.

He knew that a single crash could change that. He applied for Accident ExpenseGuard for himself and chose the $7,500 level. It was less than his deductible, but he figured a payment that size would cover most of what an ordinary accident would cost him.

The crash. On a Sunday morning in June, Kenji was out on a waterfront trail with friends. It was a social ride, not a race. His front wheel caught a gap in the pavement, and he went over the handlebars. His helmet cracked. He had a deep cut on his elbow, scrapes down one side and pain in his right shoulder.

A friend called 911, and an ambulance took him to an emergency room in St. Petersburg. A CT scan of his head led to a diagnosed concussion. X-rays showed a broken collarbone. The ER closed the cut on his elbow with stitches, treated the fracture with a sling, and gave him a prescription for pain medicine.

Over the next three weeks, he saw an orthopedic doctor on day 6, saw his own doctor about the concussion on day 9, and had a follow-up X-ray on day 20.

Matching the care to the time limits. The cut, the concussion and the ER visit were all treated the same day, inside 48 hours. The ambulance, CT scan, X-rays, fracture care, prescription and doctor visits were inside 30 days.

The charges. Kenji gave notice of the claim the next week, then sent the claim form with his EOBs. Here are the actual charges after adjustments:

• Ambulance: $1,100
• Emergency room visit: $1,650
• CT scan: $1,200
• X-rays: $260
• Stitches for the cut: $420
• Fracture care: $850
• Prescription: $20
• Orthopedic visit: $210
• Concussion follow-up visit: $160
• Follow-up X-ray: $115

Total actual charges after adjustments: $5,985.

The payment, step by step.

Step 1. Start with the actual charges: $5,985.

Step 2. Subtract the $250 deductible: $5,985 minus $250 is $5,735.

Step 3. Check the maximum. Kenji’s level is $7,500 per calendar year. $5,735 is under it, so nothing is cut off.

Accident ExpenseGuard paid $5,735, directly to Kenji. He has $1,765 of benefit left for the rest of the calendar year ($7,500 minus $5,735).

Where the money went. A week after the crash, the scrapes on his arm became infected. He went to an urgent care center and got antibiotics. That added $240 for the visit and $18 for the prescription, or $258.

All of his charges sat inside his $9,200 health plan deductible, so he owed every dollar: $5,985 for the crash care plus $258 for the infection, or $6,243. The accident plan paid $5,735 of it. The $508 left over ($6,243 minus $5,735) was the $250 deductible and the $258 for the infection. He paid that himself.

He also lost about two weeks of design work while he could not use a mouse comfortably. That came out of his savings.

What the plan did not pay.

• The infection. The policy excludes infections of any kind, regardless of how they were contracted, even when they follow a covered injury.
• Equipment. The policy excludes durable medical equipment, so anything billed as equipment would not have counted.
• The $250 deductible.

The ride itself mattered too. The policy excludes injuries while taking part in racing or speed testing. Kenji was on a social ride, so that did not apply. If he had been in a race, it would have. The policy also excludes injuries while a covered person is intoxicated, as defined by state law.

Choosing a level when your deductible is high

Margie and Kenji came at the same question from opposite ends. Here are a few ways to think it through.

Look at your out-of-pocket maximum, not just your deductible. Margie’s accident cost far more than her deductible. What she actually owed stopped at her $9,100 out-of-pocket maximum, so she chose a level just above it. At $5,000, her payment would have been $5,000, and she would have paid $4,100 of her share herself.

Think about the accidents you are most likely to have. Kenji’s crash came to $5,985. At $5,000, he would have been paid $5,000. At $7,500 or any level above it, he would have been paid the same $5,735. A higher level only pays more when the charges reach it.

Count the $250. The first $250 of charges for each covered person each calendar year is yours. A small injury under that amount will not produce a payment.

Mind the gaps the plan leaves. Equipment, infections and care not on the list of covered services can still land on you. So can lost income. The payment is yours to spend as you see fit, but it is worked out from medical charges only.

Weigh the premium. The level is one of the factors in your premium, and in a year without an accident you will not use it.

Keep it in its place. Accident ExpenseGuard is a supplement to health insurance. It is not major medical coverage, it is not Minimum Essential Coverage, and it should not be used as a substitute for comprehensive health insurance. It does not pay for illness. It also excludes expenses incurred outside the United States, and injuries arising out of, or in the course of, employment for wage or profit.

The short version

After her fall by the pool, Accident ExpenseGuard paid Margie $10,000, which covered her $9,100 out-of-pocket maximum with $900 to spare. After his bike crash, it paid Kenji $5,735, all of it toward charges that sat inside his deductible. It did not pay for the walker, the infection, the rehab stay or anything above Margie’s maximum, and it never replaced either person’s health plan.

This is an outline of how the plan works. The policy itself sets the full terms, including the exclusions and any state-specific differences.