Accident insurance and a high deductible in Texas: two examples

A health plan with a high deductible can keep your monthly premium lower. The catch shows up on the day someone gets hurt. Before your health plan pays much of anything, you can owe thousands of dollars: the emergency room, the scans, the surgeon, the anesthesia, all of it landing on you until the deductible is met.

An accident plan is one way some people in Texas plan for that gap. Accident ExpenseGuard, underwritten by Golden Rule Insurance Company, a UnitedHealthcare company, pays cash after a covered accident. The payment is based on the actual charges for your care, and it is paid regardless of what your health plan pays. Because the money comes to you, you can put it toward your deductible, your share of costs after that, or anything else the accident leaves behind.

Below are two examples set in Texas. The people are made up. The plan rules come from the carrier’s brochure.

How the payment is worked out

Every payment in this article follows the same three steps.

Start with the actual charges. You send a claim form with the Explanation of Benefits (EOB) from your health plan. The EOB shows the actual charges after the health plan’s adjustments, discounts or allowances. If there is no EOB, the plan uses what the policy calls Reasonable and Customary charges, based on the most common charge for similar services in the area.

Subtract the deductible. Accident ExpenseGuard has its own deductible of $250 per covered person per calendar year, with no more than two deductibles per family per calendar year. It is separate from your health plan’s deductible.

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

Covered services also have time limits. 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 scans, doctor visits, prescriptions, fractures, prosthetics, a hospital stay or ICU, and surgery need treatment within 30 days.

A knee injury on the basketball court in Lubbock

Teresa and Brian Gallegos live in Lubbock with their two kids, Sofia, 16, and Eli, 12. Teresa is a pharmacy technician and Brian is an HVAC estimator. They buy their own health insurance. Their plan has a $5,000 deductible per person and a $10,000 family deductible, with 20% coinsurance after that.

Sofia plays varsity basketball for her high school. Eli plays everything. Teresa had looked at that $5,000 number and asked herself what one bad landing would cost. She applied for Accident ExpenseGuard as the primary insured, added Brian and both kids, and chose the $10,000 level. Adding dependents costs more premium.

The injury. On a Tuesday night in January, Sofia came down from a rebound and her left knee buckled. The athletic trainer iced it on the bench. By the time the game ended, the knee had swollen badly, and her parents drove her to the emergency room. X-rays showed no broken bone. The ER doctor referred her to an orthopedic surgeon.

She saw the surgeon two days later and had an MRI on the fourth day. It showed a torn ACL. She had surgery at an outpatient surgery center on day 18, under anesthesia, and went home the same day with a prescription for pain medicine. She had two follow-up visits with the surgeon, on days 24 and 29.

Matching the care to the time limits. The ER visit was the same night, inside 48 hours. The X-rays, MRI, surgeon’s visits, surgery, anesthesia and prescription all fell inside 30 days.

The charges. Teresa gave notice of the claim the week after the game. 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 the health plan’s adjustments:

• Emergency room visit: $1,380
• X-rays: $240
• First visit with the orthopedic surgeon: $260
• MRI: $1,150
• Surgery: $8,900
• Anesthesia: $1,250
• Prescription: $45
• Two follow-up visits at $150 each: $300

Total actual charges after adjustments: $13,525.

The payment, step by step.

Step 1. Start with the actual charges: $13,525.

Step 2. Subtract Sofia’s $250 deductible: $13,525 minus $250 is $13,275.

Step 3. Apply the maximum. Sofia’s benefit is up to $10,000 for the calendar year. $13,275 is more than that, so the payment stops at $10,000.

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

Where the money went. On their health plan, the first $5,000 of Sofia’s charges was theirs to pay. After that, they owed 20% of the remaining $8,525, which is $1,705. Their share for Sofia’s care came to $6,705.

The $10,000 paid all of it, with $3,295 left over. Some of that went to a knee brace and crutches, which the accident plan does not pay for itself, and some went to the hours Teresa took off for appointments. The rest stayed in savings.

What the plan did not pay.

• The $3,275 above Sofia’s maximum ($13,275 minus $10,000). She has no injury benefit left for the rest of that calendar year. It starts over in January.
• Her brace and crutches. The policy excludes durable medical equipment.
• Her physical therapy. It is not on the brochure’s list of covered services, and most of her sessions came months after the injury. This example does not count it. If therapy after an injury matters to you, ask how the policy treats it.

The brochure’s sports exclusion names semi-professional, professional and intercollegiate sports, not including intramural sports. High school sports are not on that list. If she plays on a college team against other schools, an injury in one of those games would fall under that exclusion. College intramural games would not.

A road trip that ended on a West Texas highway

Gary and Lorraine Whitfield live in San Antonio. Lorraine, 56, is a residential real estate appraiser. Gary, 58, is a semi-retired electrician who still takes the odd job. They buy their own health insurance. Their plan has a $7,000 deductible for each of them, with 30% coinsurance after that.

Lorraine applied for Accident ExpenseGuard as the primary insured, added Gary, and chose the $7,500 level. She picked it because it was close to the deductible each of them would face after a bad accident.

The accident. In October they drove west for a week near Alpine and Fort Davis. It was a vacation, not work. On the third evening, on the highway between Marathon and Alpine, a deer ran into the road at dusk. Gary swerved, hit it, and the car slid into the ditch.

An ambulance took them both to the hospital in Alpine. Lorraine had a broken collarbone. Gary had a deep cut on his forehead and a diagnosed concussion. The ER closed Gary’s cut with stitches, ordered a CT scan of his head and kept him overnight to watch him. Lorraine’s X-rays confirmed the fracture, and the ER treated it and gave her a prescription for pain medicine.

Back in San Antonio, Lorraine saw an orthopedic doctor twice in the next three weeks and had a follow-up X-ray. Gary saw his own doctor once about the concussion, eight days after the crash.

Matching the care to the time limits. Both ER visits, Gary’s cut and his concussion were treated the same night, inside 48 hours. The ambulance, X-rays, CT scan, fracture care, hospital night, prescription and follow-up visits were all inside 30 days.

The charges. Each covered person is worked out separately. The EOBs showed these actual charges after adjustments.

Lorraine:

• Ambulance: $1,600
• Emergency room visit: $1,450
• X-rays: $280
• Fracture care: $900
• Prescription: $30
• Two orthopedic visits at $170 each: $340
• Follow-up X-ray: $120

Lorraine’s total: $4,720.

Gary:

• Ambulance: $1,600
• Emergency room visit: $1,450
• CT scan: $1,300
• Stitches for the cut: $480
• Overnight hospital stay: $2,600
• Follow-up doctor visit: $190

Gary’s total: $7,620.

The payments, step by step.

For Lorraine:

Step 1. Actual charges: $4,720.

Step 2. Subtract her $250 deductible: $4,720 minus $250 is $4,470.

Step 3. Her maximum is $7,500. $4,470 is under it, so the full amount is payable.

Paid for Lorraine: $4,470. She has $3,030 of benefit left for the year ($7,500 minus $4,470).

For Gary:

Step 1. Actual charges: $7,620.

Step 2. Subtract his $250 deductible: $7,620 minus $250 is $7,370.

Step 3. His maximum is $7,500. $7,370 is under it, so the full amount is payable.

Paid for Gary: $7,370. He has $130 of benefit left for the year ($7,500 minus $7,370).

Total paid to Lorraine: $11,840. That used both of the family’s $250 deductibles, the most there can be in one calendar year.

Where the money went. Lorraine’s $4,720 in charges all sat inside her $7,000 health plan deductible, so she owed every dollar of it. Gary owed his full $7,000 deductible, plus 30% of the $620 above it, which is $186. His share was $7,186.

Together they owed $11,906 for their care. The accident plan paid $11,840, which left $66 for them to cover. The tow truck, a rental car and two extra nights in Alpine came out of their savings.

What the plan did not pay.

• The two $250 deductibles.
• Anything outside the list of medical services, such as the tow, the rental car or the hotel. They could spend the payment on those, but the plan did not pay more because of them.
• If the trip had been to an appraisal for one of Lorraine’s clients, her injuries could have fallen under the policy’s exclusion for an injury arising out of, or in the course of, employment for wage or profit. Their crash happened on vacation, so that exclusion did not apply.

Neither of them had an AD&D claim. The brochure notes that in Texas, a covered death or dismemberment must take place within 90 days of the accident, rather than the 30 days it gives as the general rule.

Matching a benefit level to your own deductible

The two families above chose different levels for different reasons. Here is a way to think it through for yourself.

Start with your health plan’s deductible and out-of-pocket maximum. 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. The accident plan pays up to the level you choose for each covered person, after its own $250 deductible.

See how a level plays out. With charges of $13,525, like Sofia’s, the payment would be $5,000 at the $5,000 level, $10,000 at $10,000, and the full $13,275 at $15,000 or $20,000. With charges of $4,720, like Lorraine’s, every level from $5,000 up pays the same $4,470. A higher level only pays more when the charges are high enough to reach it.

Remember who is covered. Each covered person has their own yearly maximum and their own $250 deductible, with no more than two deductibles per family in a calendar year. If your health plan has a per-person deductible, a level near that number is one place to start.

Weigh the premium. The level is one of the factors in your premium. In a year with no accident, you will not use any of it.

Check you can apply. The primary insured and spouse must be 18 to 64 at the time of application, and children can be covered up to age 25, dropping 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.

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

The short version

After Sofia’s knee injury, Accident ExpenseGuard paid $10,000, which covered her family’s $6,705 share and more. After the crash near Alpine, it paid $11,840 for Lorraine and Gary, within $66 of what they owed. In both cases the money came to the policyholder, regardless of what the health plan paid. It did not pay for equipment, therapy, the tow or anything above each person’s maximum.

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