Florida high-deductible plans and critical illness insurance: two worked examples

If your health plan has a high deductible, you already know the deal you made. You pay less each month, and in return you carry more of the cost when something goes wrong. With a serious diagnosis, that can mean thousands of dollars before your health plan pays much, and then coinsurance on top, every plan year until treatment ends.

A critical illness plan is built for that moment. CriticalGuard, underwritten and administered by Golden Rule Insurance Company, a UnitedHealthcare company, pays a lump sum when a covered person has a covered diagnosis. It pays regardless of what any other insurance pays. The money is paid to you, and you decide where it goes: the deductible, the coinsurance, the rent, the drive to treatment.

What it is not matters just as much. The brochure says CriticalGuard is a supplement to health insurance and not a substitute for it. It isn’t Minimum Essential Coverage under the Affordable Care Act. It pays for critical illnesses only, in a stated amount, regardless of the actual expense.

Below are two fictional Florida examples, worked out from the brochure: a family with young children, and a woman in her early 60s.

The plan in brief

CriticalGuard comes in four plans: Cancer, Heart/Stroke, Cancer + Heart/Stroke, and the full-suite Critical Illness plan, which adds a Critical Conditions category.

You choose a Benefit Lifetime Maximum Amount in $5,000 steps. It’s the most the plan pays in a lifetime for one category of Qualifying Events, and plans with two or three categories give each one its own maximum. Each Qualifying Event pays a set share of it. In the Cancer category, life-threatening cancer pays 100%, cancer in situ and benign brain tumor pay 25%, and skin cancer pays a flat $500. In the Heart/Stroke category, heart attack and stroke pay 100% and heart illness pays 25%.

A few rules shape every claim:

• First Diagnosis. The plan pays for the first time a Qualifying Event happens in the covered person’s lifetime, after the waiting period, while the coverage is in effect.
• A 30-day waiting period after the plan’s effective date.
• A preexisting conditions limitation. The plan won’t pay for a Qualifying Event caused or contributed to by a Preexisting Condition. That includes a condition you had medical advice, care or treatment for in the 12 months before your effective date. The limitation lasts no longer than 12 months after the effective date.
• Per covered person. Each person on the policy has their own maximums.

What’s different in Florida

The brochure lists two Florida changes:

• Eligible child goes further. In general, an eligible child is your or your spouse’s child under 26. In Florida, it also includes a child 26 or older, up to the child’s 31st birthday, who is unmarried and not covered by any other health benefit plan.
• Longer notice of a premium change. The general rule is at least 31 days’ notice. In Florida, it’s at least 45 days.

Everything else follows the general brochure. That includes the Optum programs, which are available in Florida, and the activity exclusions, which still apply.

Jason, Nicole and their son in Brandon

Jason is 41 and an electrician for a commercial contractor. Nicole is 39 and works part-time in the front office of an elementary school. They live in Brandon with their children, Ava, 10, and Leo, 7.

Their family health plan through Jason’s work has a $4,000 deductible for each person and an out-of-pocket maximum of $7,500 per person, up to $15,000 for the family. In most years they spend a few hundred dollars on checkups and a sick visit or two. Nicole once asked herself what would happen if one of the kids got seriously ill. The honest answer was $7,500 in a year for that child alone, and maybe the next year too.

What they chose. Jason’s father had a heart attack at 50. Nicole’s aunt had breast cancer. So they chose a Cancer + Heart/Stroke plan, with the whole family on it: Jason as the primary insured, Nicole as his spouse, and both children as eligible children.

When they applied, Jason was 39 and Nicole was 37. At issue ages 18 to 49, this plan’s range is $50,000 to $100,000, and the brochure lists no guaranteed issue amount for it at those ages, so the application asked medical questions. They chose $50,000. That gave each of the four of them a $50,000 Cancer maximum and a separate $50,000 Heart/Stroke maximum, because the brochure says benefits are per covered person.

They didn’t add a rider.

What happened. About two years after the plan took effect, in February, Leo stopped wanting to play outside. He was pale, he bruised easily, and a fever wouldn’t go away. His pediatrician ordered blood work and sent them to a children’s hospital in St. Petersburg the same week. There, doctors diagnosed acute lymphoblastic leukemia.

Nicole printed the claim form from the UHC Member Hub. The brochure asks for notice of a claim within 30 days after the First Diagnosis, or as soon as reasonably possible. She sent it with the information the form asked for.

The arithmetic. Leo’s diagnosis was reviewed under the policy’s definition of life-threatening cancer:

• Leo’s Cancer Benefit Lifetime Maximum Amount: $50,000
• Share for life-threatening cancer: 100%
• $50,000 × 100% = $50,000

The plan paid $50,000 in one lump sum. The brochure says benefits are paid directly to you, the policyholder. It made no difference that their health plan was also paying for Leo’s care.

Where the money went. Leo reached his $7,500 out-of-pocket maximum by April: the $4,000 deductible, then $3,500 of coinsurance. His treatment will continue for well over a year, so they planned for the reset in January.

• $7,500 for this year’s out-of-pocket costs for Leo
• $7,500 set aside for next year’s, when his deductible starts over
• $10,800 to replace Nicole’s pay. She left her job for 18 weeks, at about $600 a week.
• $2,400 for gas, parking and meals on the drives to St. Petersburg
• $1,800 for after-school care and rides for Ava
• $20,000 into savings

That adds up to $50,000. It meant Nicole could stay home with Leo without the family falling behind on the mortgage.

They also used the Optum Cancer Resource Service, which comes with the Cancer + Heart/Stroke plan at no added cost. An oncology nurse answered their questions and helped them think through a second opinion. The brochure says these Optum programs are not insurance and may require a diagnosis to qualify.

What it didn’t do. Leo’s Cancer category is now paid in full. If his cancer comes back, this plan won’t pay another cancer benefit for him. The policy also excludes loss from any other disease, including one complicated or caused by a Qualifying Event or its treatment. When Leo spent four nights in the hospital with an infection during chemotherapy, the plan paid nothing extra. Their health plan handled that bill, inside the out-of-pocket maximum.

After the claim, the family’s coverage stood like this:

• Leo, Cancer: $50,000 paid, $0 left
• Leo, Heart/Stroke: $50,000 still available
• Jason, Nicole and Ava: both categories untouched, $50,000 each

Maureen in Sarasota

Maureen is 63 and keeps the books for two small businesses in Sarasota. She buys her own health plan. It has a $7,500 deductible and an out-of-pocket maximum of $9,000. She chose it for the lower premium and has never regretted it in an ordinary year.

What she chose. At 61, Maureen bought a Cancer plan. Her mother and her sister both had cancer, and she spends her free time gardening and walking the beach. At issue ages 50 to 64, the Cancer plan’s range is $10,000 to $100,000, and $10,000 is guaranteed issue. She chose $25,000 and answered the medical questions.

The first claim. Fourteen months after her plan took effect, a dermatologist removed a small spot from Maureen’s forearm. It was reviewed under the policy’s definition of skin cancer. Skin cancer pays a flat $500, whatever maximum you choose, and it’s limited to one benefit per person, per lifetime.

• Cancer maximum: $25,000
• Paid for skin cancer: $500
• $25,000 − $500 = $24,500 still available in her Cancer category

The removal cost her $640, all of it under her deductible. The $500 covered most of it.

The second claim. Sixteen months later, Maureen had bleeding she hadn’t had since menopause. Her gynecologist ordered an ultrasound and a biopsy, which found uterine cancer. She had surgery in March, then several weeks of radiation.

Life-threatening cancer pays 100%. But part of her Cancer category had already been paid, and the brochure says the total paid in a category never goes above the maximum:

• 100% of her $25,000 maximum would be $25,000
• Already paid in the Cancer category: $500
• Most the category can still pay: $25,000 − $500 = $24,500
• Paid for life-threatening cancer: $24,500
• Total paid in her Cancer category: $500 + $24,500 = $25,000

Where the money went. Her surgery and treatment all fell in one plan year:

• $9,000 for her out-of-pocket maximum: the $7,500 deductible, then $1,500 of coinsurance
• $6,000 to replace income. She paused her bookkeeping for four months, at about $1,500 a month.
• $1,500 for rides, parking and meals on radiation days
• $7,500 set aside for next year’s deductible, since follow-up scans continue
• $500 into savings

That adds up to $24,500. Maureen also called the Optum Cancer Resource Service, included with the Cancer plan, to help her find a provider for a second opinion.

What it didn’t do. Maureen’s Cancer category is now paid in full. The plan won’t pay for a recurrence, a new cancer, or another skin cancer. Even before the uterine cancer, a second skin cancer wouldn’t have paid, because skin cancer is limited to one benefit per lifetime.

A Cancer plan covers cancer only. If Maureen has a heart attack or a stroke, this plan pays nothing. People who want both should compare the Cancer + Heart/Stroke plan, which gives each category its own maximum.

Her two claims came after her preexisting conditions limitation had ended, at 14 and 30 months. A diagnosis in her first year that traced back to care or treatment from the 12 months before her plan took effect could have been a different story.

Matching a benefit amount to your deductible and costs

Both households started with their own numbers, not a round figure. You can do the same.

Write down your health plan’s limits. Your out-of-pocket maximum is the most you’d pay for covered care in one plan year, under your health plan’s rules. On a family plan, write down the per-person and family figures.

Count the second year. The deductible resets. Leo’s treatment ran past January. Maureen’s follow-up scans did too. Both set aside a second year’s costs.

Add the rest of life. Lost pay, a spouse’s lost pay, travel, child care, meals out because no one has time to cook.

Then test the partial benefits. Suppose your out-of-pocket maximum is $9,000 and you expect $6,000 of other costs. That’s $15,000, and say your age band allows a $15,000 maximum:

• A $15,000 maximum pays $15,000 for a life-threatening cancer, a heart attack or a stroke.
• The same $15,000 pays $15,000 × 25% = $3,750 for cancer in situ, a benign brain tumor or heart illness.
• Skin cancer pays $500, at any maximum.

Seen that way, the choice is about which events you most want covered in full, and what you can afford in premium.

Check your age band. Your issue age sets the range. At 18 to 49, the Cancer, Heart/Stroke and Cancer + Heart/Stroke plans start at $50,000. At 50 to 64 they start at $10,000. The full-suite Critical Illness plan starts at $5,000 at any age. Guaranteed issue amounts are smaller, and anything above them means medical questions.

Remember the family math. On a family policy, each person has their own maximums. Leo’s claim didn’t touch his sister’s or his parents’ coverage.

The policy is guaranteed renewable for life, as outlined in the policy. In Florida, you get at least 45 days’ notice of any premium change, and premiums won’t change solely because of a claim or a change in your health. After the policy is issued, you have a free look of 10 days.

The short version

• A high deductible plus coinsurance can cost thousands in one plan year, and again the next. A CriticalGuard lump sum can cover that and more, paid to you.
• On a family plan, each person has their own maximum, so a child’s diagnosis pays on the child’s own category.
• A smaller earlier payment, like a $500 skin cancer benefit, comes out of the same category maximum.
• In Florida, an unmarried child up to 31 who has no other health benefit plan can be an eligible child, and premium changes come with at least 45 days’ notice.
• CriticalGuard is a supplement, not health insurance, and not Minimum Essential Coverage.

This is a fictional illustration. The policy sets the full terms of coverage, and actual benefits, underwriting rules and availability depend on carrier guidelines and state regulations.