Medford mail tribune., November 10, 1957, Image 45

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Illness can be a major catastrophe unless you
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prepare in advance for ample protection.
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MILLIONS OF PEOPLE
in
to
10
GROWTH OP HOSPITAL.
SURGICAL. AND REGULAR
MEDICAL EXPENSE
PROTECTION
HOSPITAL ,
URGICAL
h
REGULAR
MEDICAL
l42 144 M4 M4 (flO MSI 1$4 MM
to American families. The most common are those
which pay hospital, surgical, or medical bills, or a
combination of the three. The fourth type is designed
to meet the expenses of major illness, and the fifth
protects a person against loss of income due to sick
ness or accident.
What about Cousin Fred? Had he been insured,
what would his benefits have been? And what would
he have paid yearly to carry any or all of these pro
tective policies?
Let's suppose he had had a hospitalization policy.
This covers room, board, operating room, drugs,
oxygen, and related expenses up to certain limits.
Hospital insurance in fact, any of these five types of
insurance is available either on an individual or a
group basis. A group policy covers all the employees
of a company or all members of a union or other
organization. The larger the group, of course, the
smaller the cost to each individual and the greater the
benefits offered.
Cousin Fred works for a company with 500 em
ployees. Although hospitalization benefits vary by
locality, Fred would have received about $2,200.
ROWTH OP MAJOR
MEDICAL EXPENSE
' : ... COVERAGE :
:.ddUUU
. ; mi mi INI , MM INI ' - MM
"3
4
Source: Health Insurance Council
Because Fred's office has group protection with a
large company, the policy would have cost him $82
annually. The benefits of this plan (which would cost
$150 yearly on an individual basis) would have in
cluded $15 a day for 90 days hospitalization plus $150
in miscellaneous expenses.
Fred required surgery, too. A policy which would
have protected him and his family against surgical
bills would have cost $39 pn a group basis or $58 on
an individual basis. Having this policy would have
reduced Fred's surgeon's bill $200-300. Moreover, a
medical-expense policy (which covers doctors, spe
cialists, office visits, etc.) would have whittled down
this part of the bill even more.
nrODAY 115 million Americans have some sort of
' hospital coverage; 101 million have surgical
protection; 64 million have medical-expense
coverage. This is all to the good, yet specific policies
have specific shortcomings.
For example, what if Fred carried hospital insur
ance, but took ill at home and was confined there?
What if he had coverage for a surgeon's bill but
needed only the ?rvices of 8 rfiyiiciiH Wtft if tit
illness dragged on long beyond th timt, limitt c his
hospital policy? Then, of cour, Frtd 'ould h ctat
of luck and would have to pjy out-of-pockt. Un
fortunately, few of us can ever protect ourlves with
specific policies against all the possibilities which
might occur.
Realizing these gaps (particularly where there ic
severe illness), insurance companies now offer
more extensive coverage called major medical expense
or catastrophe-coverage insurance. These policies
take effect only after the first $300-500 of medical
expenses. In short, they are not designed to pay
small bills but rather the huge sums of money which
major illness demands.
Some catastrophe policies give $10,000 coverage.
Most are written for $5,000. Some require that you
pay a percentage of the total; others do not. All are
designed to cover every phase of illness (doctor,
surgeon, hospital, drugs, treatments, etc.).
For $132 Fred could have purchased an individual
catastrophe policy for his family; for $48 he could
have bought the same coverage through his office
group. Either way, he would have had to pay" the
first $300 expense and 25 percent of the total after
that, but the insurance would have covered all the
rest of his bills up to $5,000. In short, Fred's illness
would have cost him $1,875 instead of $5,400.
riNALLY. there is a form of protection called dis-
ability insurance which pays not for specific
expenses but rather for loss of income due to
sickness or accident, or both. If Fred had figured
that his family could live on $75 a week should he be
disabled, he could have bought a group policy for $85
(or an individual policy for $118) which would have
provided him with this weekly amount. Had he been
injured, the payment would have begun immediately
and continued for 12 months; had he been disabled
by illness, payments would have started on the eighth
day and continued for six months. There are many
variations of this type of insurance, but basically the
purpose is always the same: to provide income for
the family when the wage earner can't work.
Fred gambled on his health. Illness, he figured, was
something that happened to the other fellow. As a
result he neither practiced prevention nor protected
himself with insurance. Over a period of 10 years he
figured that the group plans at his office (for hos
pitalization, surgery, major medical expense, and
disability) would have cost him more. than $2,500.
What he didn't figure what the statistically fortunate
usually forget is that in one month he ran up bills
for twice that amount!
Certainly there are plenty of people who would like
health insurance but who, for one reason or another,
can't get it. They can't afford to be sick! But for
Fred for most of us financial worries about illness
can be greatly reduced by planning, by prevention,
and by insurance protection.
Family Weekly, November 10, 1957 13