How accident insurance can help with a high deductible in North Carolina

A high deductible is a trade. You pay less each month, and in return, if something happens, you pay more of the bill yourself before your health plan starts to pay much. For one accident, that can mean thousands of dollars.

An accident plan can help with that part. Accident ExpenseGuard is underwritten by Golden Rule Insurance Company, a UnitedHealthcare company. After a covered accident, it pays you cash based on the actual charges for your care. It pays regardless of what your health plan pays, and you decide how to use the money. You can put it straight toward the deductible.

This article follows two made-up households in North Carolina through an accident each. The plan details are from the carrier’s brochure.

How Accident ExpenseGuard pays

A level you choose. The accidental injury benefit is $5,000, $7,500, $10,000, $15,000 or $20,000 per covered person per calendar year. It starts over each year.

A $250 deductible. The plan has its own deductible of $250 per covered person per calendar year, with up to two per family per calendar year. It is separate from the deductible on your health plan.

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

The payment. Actual charges, minus the $250 deductible, up to the level you chose.

An AD&D benefit. Every plan includes accidental death and dismemberment (AD&D) coverage for the same amount as the injury level. It is a lifetime maximum, not a yearly one, and it pays in addition to the injury benefit.

Time limits for care. Burns or lacerations, a diagnosed concussion, an emergency room visit and an urgent care center visit need treatment within 48 hours of the accident. Ambulance, labs and X-rays, anesthesia, MRI or CT scan, doctor visits, prescriptions, fractures, prosthetics, a hospital stay or ICU, and surgery need treatment within 30 days.

A kitchen burn in Fayetteville

Terrence and Renee Bell live in Fayetteville with their kids, Aaliyah, 9, and Jonah, 6. Terrence, 39, manages a tire shop. Renee, 37, is a nurse, and the family’s health insurance comes through her job. It is a high-deductible plan: $4,000 per person and $8,000 for the family.

Renee did not like the idea of a $4,000 surprise. She applied for Accident ExpenseGuard as the primary insured, added Terrence and both kids, and chose the $5,000 level. Adding dependents costs more premium. She picked $5,000 because it was a little above the per-person deductible, and with four people covered she wanted to keep the premium in check.

The burn. On a Saturday evening in November, Terrence was frying fish on the stove. The pan tipped as he moved it, and hot oil ran over the back of his left hand and up his forearm. Renee got his arm under cool running water and drove him to an urgent care center a few minutes away.

The urgent care doctor dressed the burn and sent him to the emergency room that night, because of how much skin was involved. The ER treated it as a second-degree burn, cleaned and dressed it, and gave him a prescription for burn cream and pain medicine. He was referred to a hospital burn clinic. He went back to the clinic four times, on days 3, 7, 14 and 21.

On day 10, one part of the burn became infected. He had an extra clinic visit and a course of antibiotics.

Matching the care to the time limits. The burn, the urgent care visit and the ER visit were all treated the same evening, inside 48 hours. His prescriptions and the four scheduled clinic visits all came inside 30 days.

The charges. Renee gave notice of the claim that week. The policy asks for notice within 30 days of the date the loss began, or as soon as reasonably possible. Here are the actual charges on the EOBs after adjustments:

• Urgent care center visit: $210
• Emergency room visit: $1,480
• Burn cleaning and dressing at the ER: $390
• Prescriptions: $65
• Four burn clinic visits at $230 each: $920

Total actual charges after adjustments: $3,065.

The infection added a $230 visit and $22 of antibiotics, or $252. Those are not counted, for reasons below.

The payment, step by step.

Step 1. Start with the actual charges: $3,065.

Step 2. Subtract Terrence’s $250 deductible: $3,065 minus $250 is $2,815.

Step 3. Check the maximum. His level is $5,000 per calendar year. $2,815 is under it, so the full amount is payable.

Accident ExpenseGuard paid $2,815, directly to Renee. Terrence has $2,185 of benefit left for the year ($5,000 minus $2,815). Renee and the kids each still have their full $5,000.

Where the money went. Terrence’s charges all sat inside his $4,000 health plan deductible. He owed $3,065 for the burn care and $252 for the infection, or $3,317 in all. The $2,815 paid most of it. The $502 left ($3,317 minus $2,815) was the $250 deductible and the $252 for the infection.

He also missed four days at the tire shop while his hand was too raw to use. They made up that lost pay from savings.

What the plan did not pay.

• The infection. The policy excludes infections of any kind, regardless of how they were contracted.
• The $250 deductible. That was the first of the family’s two deductibles for the year. If a second person is hurt later that year, a second $250 applies. After that, no more for the rest of the calendar year.

The burn happened at home. If Terrence had been burned at the tire shop, the policy’s exclusion for an injury arising out of, or in the course of, employment for wage or profit would have applied, and this plan would not have paid.

A table saw accident in Hickory

Dale and Carol Hughes live outside Hickory. Dale, 58, is a self-employed land surveyor. Carol, 55, keeps the books for a few small businesses. They buy their own health insurance. Each of them has a $6,500 deductible, 30% coinsurance after that and a $9,000 out-of-pocket maximum.

Dale’s work depends on his being in the field. Carol’s question when they shopped was simple: what happens to us if he is hurt and cannot work? They applied for Accident ExpenseGuard with Dale as the primary insured, added Carol, and chose the $20,000 level. That was more than his out-of-pocket maximum, with room left for lost income. It also set their AD&D amount at $20,000 each.

Dale builds furniture in a shop behind the house. It is a hobby. Everything he makes goes to his family, and he has never sold a piece.

The accident. On a Saturday afternoon in July, a board kicked back on the table saw and pulled his left hand into the blade. Carol wrapped his hand in a towel and called 911. An ambulance took him to the hospital in Hickory.

X-rays showed the damage to his thumb and index finger. A hand surgeon operated that night, under anesthesia. Neither could be saved, and both were amputated in that surgery. He had a second, shorter operation on day 2 to close the wounds, and went home after two nights with prescriptions. He saw the hand surgeon three times in the next four weeks.

Matching the care to the time limits. The ER visit and the cuts were treated the same day, inside 48 hours. The ambulance, X-rays, both surgeries, anesthesia, hospital stay, prescriptions and follow-up visits were inside 30 days.

The charges. Carol gave notice of the claim from the hospital. Here are the actual charges on the EOBs after adjustments:

• Ambulance: $1,350
• Emergency room visit: $2,100
• X-rays: $340
• Two surgeries: $11,800
• Anesthesia: $2,400
• Two-night hospital stay: $5,600
• Prescriptions: $90
• Three follow-up visits at $195 each: $585

Total actual charges after adjustments: $24,265.

The injury benefit, step by step.

Step 1. Start with the actual charges: $24,265.

Step 2. Subtract the $250 deductible: $24,265 minus $250 is $24,015.

Step 3. Apply the maximum. Dale’s level is $20,000 per calendar year. $24,015 is more than that, so the payment stops at $20,000.

Injury benefit paid: $20,000.

The AD&D benefit, step by step. The brochure lists what share of the AD&D amount is paid for each kind of loss. The loss of the thumb and index finger on the same hand is 25%.

Step 1. Start with Dale’s AD&D amount: $20,000.

Step 2. Apply the percentage: 25% of $20,000 is $5,000.

Step 3. Check the timing. The loss has to take place within 30 days of the accident. Dale’s took place the same night.

AD&D benefit paid: $5,000.

Total paid to Dale: $25,000.

His AD&D maximum is for his lifetime, so he now has $15,000 of AD&D left ($20,000 minus $5,000). His injury benefit starts over in January.

Where the money went. On their health plan, Dale owed the first $6,500. After that, 30% of the remaining $17,765 would have been $5,329.50, for a total of $11,829.50. His $9,000 out-of-pocket maximum stopped it there.

That left $16,000 of the payment after his $9,000 share. Dale could not work in the field for about two months. The rest of the money covered their bills through that time and paid a helper to carry equipment on his first jobs back.

What the plan did not pay.

• The $4,015 above his injury maximum ($24,015 minus $20,000). His health plan handled its share of that under its own terms.
• His hand therapy. The outpatient sessions he went to for months afterward were occupational therapy, which the policy excludes.

The hobby part mattered. If Dale sold his furniture, an injury in the shop could have fallen under the exclusion for injuries arising out of, or in the course of, employment for wage or profit. Because his woodworking is a hobby, it did not.

Fitting a level to your deductible

Renee chose $5,000 and Dale chose $20,000, and both choices made sense for them. Here is how to think about your own.

Know your numbers. Find your health plan’s deductible and out-of-pocket maximum for each person. Those two numbers are the place to start: your plan’s out-of-pocket maximum is the most it says you pay for covered care in a year.

Compare the levels with a real-sized accident. Terrence’s burn came to $3,065 in charges, so every level from $5,000 up would have paid the same $2,815. Dale’s accident came to $24,265, so the level he chose made all the difference: $5,000 at the $5,000 level, $10,000 at $10,000, $15,000 at $15,000 and $20,000 at $20,000.

Remember the AD&D amount follows the level. At $5,000, the loss of a thumb and index finger on the same hand would pay 25%, or $1,250. At $20,000, it paid $5,000.

Count everyone separately. Each covered person has their own yearly maximum and their own $250 deductible, with up to two deductibles per family each calendar year.

Weigh the premium. The level is one of the factors in your premium, and adding dependents costs extra. In a year without an accident, you will not use the coverage.

Check you can apply. The primary insured and spouse must be 18 to 64 at the time of application. Children can be covered up to age 25 and drop off on their 26th birthday, or as required by state. The policy is renewable until the primary insured’s 70th birthday, subject to its terms, and it says premiums will not change solely because of claims or a change in a covered person’s health.

Know what it is. Accident ExpenseGuard covers accidents, not illness. It is a supplement to health insurance, not major medical coverage, and it is not Minimum Essential Coverage. It should not be used as a substitute for comprehensive health insurance.

The short version

After his kitchen burn, Accident ExpenseGuard paid Terrence’s family $2,815, which covered most of what his deductible left them owing. After his table saw accident, it paid Dale $20,000 in injury benefits and $5,000 in AD&D benefits, enough to cover his out-of-pocket maximum and two months out of work. It did not pay for the infection, his hand therapy or the charges above his maximum, and it would not have paid for an injury on the job.

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