When an accident meets a high deductible: two Iowa examples

If your health plan has a high deductible, a single accident can leave you owing thousands of dollars before your plan pays much. For someone in Iowa who buys their own coverage, or who has a plan like that through work, the deductible can be the largest bill an accident brings.

Accident ExpenseGuard is a supplemental accident plan underwritten by Golden Rule Insurance Company, a UnitedHealthcare company. After a covered accident, it pays cash directly to you. The payment is based on the actual charges for your care and does not depend on what your health plan pays. You can put it toward your deductible or use it any other way.

Here are two fictional examples from Iowa: a farmer near Ames, and a mother in Cedar Rapids whose daughter is in college. The plan rules come from the carrier’s brochure.

The rules that set every payment

You choose an accidental injury benefit of $5,000, $7,500, $10,000, $15,000 or $20,000. That is the most the plan pays per covered person per calendar year, and it starts over each year. Every plan includes an accidental death and dismemberment (AD&D) benefit of the same amount, as a lifetime maximum.

The injury benefit is worked out the same way each time:

1. Start with the actual charges for covered care. The plan uses your health plan’s Explanation of Benefits (EOB), which shows the charges after the health plan’s adjustments, discounts or allowances. Without an EOB, it uses what the policy calls Reasonable and Customary charges.
2. Subtract a $250 deductible, per covered person per calendar year, up to two per family per calendar year.
3. Pay the result, up to the level you chose.

Covered services come with time limits. Burns or lacerations, a diagnosed concussion, an emergency room visit and an urgent care visit are covered when treatment is within 48 hours of the accident. Ambulance, labs and X-rays, anesthesia, MRI or CT scans, doctor visits, prescriptions, fractures, prosthetics, a hospital stay or ICU, and surgery are covered when treatment is within 30 days.

The brochure lists no separate rules for Iowa. It does say state-specific differences may apply, so the policy is the final word.

Example one: a snowmobile crash near Ames

Bryce is 39 and single. He farms corn and soybeans outside Ames with his older brother and keeps a small herd of cattle. He buys his own health insurance. His plan has an $8,700 deductible. Once he meets it, his plan pays in full for the rest of the year.

He chose Accident ExpenseGuard at the $10,000 level, covering only himself. He picked a level just above his deductible on purpose: if he ever had a big accident, he wanted the payment to be able to cover the whole deductible.

The accident

On a Saturday evening in January, Bryce and two friends took their snowmobiles out across a neighbor’s fields after a fresh snow. Bryce’s sled hit a drainage ditch hidden under a drift, and he was thrown forward. His right leg struck the frame. One of his friends called 911.

An ambulance took him to the hospital in Ames. X-rays and a CT scan showed a broken lower leg. The next morning a surgeon placed a rod in the bone, under anesthesia. Bryce stayed two nights in the hospital and went home with prescriptions and a pair of crutches. He saw the surgeon on day 12 and day 26, with an X-ray at the second visit.

Matching his care to the time limits

His emergency room visit was the same night, inside 48 hours. The ambulance, imaging, surgery, anesthesia, hospital stay, prescriptions, follow-up visits and the last X-ray were all within 30 days.

The claim

The policy requires notice of claim within 30 days of the date the loss began, or as soon as reasonably possible. Bryce’s brother gave notice from the hospital. Bryce sent the claim form with the EOBs a few weeks later. The actual charges after his health plan’s adjustments:

• Ambulance: $1,900
• Emergency room visit: $2,050
• X-rays and CT scan: $1,380
• Surgery: $10,200
• Anesthesia: $1,450
• Two-night hospital stay: $6,100
• Prescriptions: $70
• Two follow-up visits at $185 each: $370
• Follow-up X-ray: $125

Total actual charges after adjustments: $23,645.

The arithmetic

Step 1. Start with the actual charges: $23,645.

Step 2. Subtract the $250 deductible: $23,645 minus $250 is $23,395.

Step 3. Apply the maximum. Bryce’s benefit is up to $10,000 for the calendar year. $23,395 is more than that, so the payment stops at $10,000.

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

He had used his whole benefit for the year. It starts over in January.

Putting it against his deductible

Bryce’s charges were far above his $8,700 deductible, so he owed the full $8,700 and his health plan paid the rest.

• What he owed: $8,700
• What Accident ExpenseGuard paid: $10,000
• Left over: $1,300

He paid his deductible in full and used the $1,300 to hire a neighbor’s son for a few weeks of chores his brother could not cover alone.

How the level played out

His charges after the deductible were $23,395 at any level, so his choice of level set the payment:

• At $7,500, the plan would have paid $7,500, leaving him $1,200 short of his deductible.
• At $10,000, his actual choice, it paid $10,000, covering the deductible with $1,300 left.
• At $15,000, it would have paid $15,000, covering the deductible with $6,300 left.
• At $20,000, it would have paid $20,000, covering the deductible with $11,300 left.

The level is one of the factors in your premium. For Bryce, the point was the deductible, and his level covered it.

What the plan did not pay

Farm work. This is the limit that matters most for Bryce. The policy excludes an injury arising out of, or in the course of, employment for wage or profit. He was out with friends on a Saturday night, so the exclusion did not apply. If he had been on the same snowmobile in the same field checking on his cattle, he would have been hurt doing the work that earns his living, and this plan would not have paid. Coverage for injuries on the job is a separate question for him.

Racing. The policy excludes injuries while racing or speed testing. Riding across a field with friends is not racing. A timed or competitive run would be a different story, so ask how the policy treats it.

Intoxication. The policy excludes a loss while a covered person is intoxicated, as defined by applicable state law.

His crutches. The policy excludes durable medical equipment.

Anything above $10,000. His charges after the deductible were $23,395. The plan paid its maximum for the year.

Example two: an intramural football injury in Iowa City

Paula is 49 and runs the front desk at a veterinary clinic in Cedar Rapids. Her daughter, Maya, is 20 and a junior at a university in Iowa City. Paula’s health plan through work covers both of them, with a $5,800 deductible for each person.

Paula bought Accident ExpenseGuard at the $5,000 level as the primary insured and added Maya for extra premium. Children can be covered from birth to age 25 and drop off on their 26th birthday, or as required by state, so Maya can stay on the plan until she turns 26.

The accident

On a Thursday night in October, Maya was playing in her dorm’s intramural flag football league. Going for a pass, she collided head first with another player. Her nose was bleeding and clearly broken, she had a cut above her right eyebrow, and she felt dazed and sick to her stomach.

Two friends drove her to the emergency room. A CT scan ruled out a skull fracture, and the ER doctor diagnosed a concussion and stitched the cut. She was referred to an ear, nose and throat doctor, who saw her on day 2, set her broken nose in the office on day 6, and saw her again on day 20. She filled one prescription.

Paula drove down to Iowa City the next morning and stayed through the weekend.

Matching her care to the time limits

The emergency room visit, the diagnosed concussion and the stitches were all the same night, inside 48 hours. The CT scan, the specialist visits, the fracture care and the prescription were all within 30 days.

Why intramural sports count

The brochure excludes injuries while taking part in semi-professional, professional or intercollegiate sports, and it says that exclusion does not include intramural sports. Maya’s dorm league is intramural. If she had been hurt playing on her university’s varsity team, the exclusion would have applied.

The claim

Paula gave notice of the claim the following week and sent the claim form with the EOBs. The actual charges after their health plan’s adjustments:

• Emergency room visit, including the concussion diagnosis: $1,700
• CT scan: $950
• Repair of the cut: $420
• Two specialist visits at $230 each: $460
• Setting the broken nose: $1,150
• Prescription: $25

Total actual charges after adjustments: $4,705.

The arithmetic

Step 1. Start with the actual charges: $4,705.

Step 2. Subtract Maya’s $250 deductible: $4,705 minus $250 is $4,455.

Step 3. Check the maximum. Maya’s benefit is up to $5,000 for the calendar year. $4,455 is under that.

Accident ExpenseGuard paid $4,455, directly to Paula.

Maya had $545 of benefit left for the year ($5,000 minus $4,455). Paula still had her full $5,000.

Putting it against her deductible

Maya had not used any of her $5,800 deductible that year, so every dollar of the $4,705 was theirs to pay.

• What they owed: $4,705
• What Accident ExpenseGuard paid: $4,455
• The difference: $250, the accident plan’s deductible.

What the plan did not pay

Cosmetic treatment. Maya’s nose healed straight, but if she had later wanted a cosmetic change to it, or to the scar above her eyebrow, the policy excludes cosmetic treatment.

Intercollegiate sports. As above, intramural play is covered and varsity play is not.

Infections. If the cut had become infected, the policy’s exclusion for infections of any kind would have applied to that treatment.

Paula’s trip. The gas, the hotel and the day of work she missed are not medical charges. The plan paid on Maya’s care, and Paula was free to use the money for anything, but the payment itself was set by the medical charges.

Matching a benefit level to your own deductible

The two examples sit on either side of the same line.

Maya’s claim was smaller than her level. Any claim of up to $5,250 in actual charges would be paid back to Paula minus $250. In that range, the level does not change the payment: a $20,000 level would have paid the same $4,455.

Bryce’s claim was larger than his level. Above that line, the level is the payment. His $10,000 level covered his $8,700 deductible. A $7,500 level would not have.

Paula’s $5,000 level sits $800 below each person’s $5,800 deductible. If either of them had an accident with $5,800 or more in charges, the plan would pay no more than $5,000 for that person that year, and at least $800 of the deductible would be left to them. That was a choice she made with the premium in mind.

Questions worth working through:

What is your deductible, and is it per person or per family? Compare it with the levels: $5,000, $7,500, $10,000, $15,000 or $20,000. Each covered person has their own yearly maximum.

What happens after you meet it? Bryce’s plan pays in full once the deductible is met. Other plans add coinsurance up to an out-of-pocket maximum. Use whichever number is the most you could owe.

Who in your household is most active? A college student in an intramural league, a teenager learning to drive, a parent who rides snowmobiles or ATVs on the weekend. Adding each dependent costs extra premium.

Where do you work? The plan does not cover injuries arising out of employment for wage or profit. If you farm, build or do other physical work for a living, the injuries most likely to happen to you may be the ones it does not cover.

Can you apply? The primary insured and spouse 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.

What it is not. Accident ExpenseGuard is a supplement. It is not major medical coverage, it is not Minimum Essential Coverage, and it is not a substitute for comprehensive health insurance.

The short version

After Bryce’s snowmobile crash near Ames, Accident ExpenseGuard paid him $10,000, enough to cover his $8,700 deductible with $1,300 left. After Maya’s intramural football injury in Iowa City, it paid Paula $4,455, all but $250 of what they owed inside the deductible. Neither claim would have been paid if the injury had come from work, varsity sports or racing.

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