As households are faced with the economic hardships brought on by COVID-19, evaluating insurance coverage, coverage gaps, and overall financial health is more critical than ever. Are families prepared for the unexpected? Do they understand the benefits of the policies they have? Do they have funds to cover out-of-pocket expenses that may come with a major medical treatment or hospital stay?
While “value” has always been subjective, during a pandemic, those opinions can swing drastically. Questions of preparedness may feel more relevant to families than ever before. Individuals who are uninsured or underinsured as well as families with employer-sponsored insurance can face high out-of-pocket expenses due to illness and hospital stays. According to an article published by Urban Institute, typical costs associated with hospital admissions for pneumonia in 2018 were estimated to be about $10,000 without complications and $20,000 with complications. An uninsured patient treated for COVID-19 in Boston in February 2020 reported her bills for testing and treatment totaled nearly $35,000. Would your family have the resources to pay those out-of-pocket expenses?
Most consumers are continually measuring value against the cost or benefit for all things they buy. In the case of insurance, the value is protection. What is the risk of not having insurance or the right kind of insurance? Do they believe they will need the benefits that an insurance program provides and at what level? What is their financial health overall?
According to a recent study published by Financial Health Network, only 29% of American’s were financially healthy in 2019. That leaves a staggering percentage that will be vulnerable to a major financial setback. The impacts of COVID-19 will continue to be realized over the coming months and years, but what do we already know? Many families have already experienced job loss, furlough with reduced salaries, or straight company layoffs. This not only affects household income but likely access to employer sponsored insurance. Many people may delay or skip treatment for COVID-19 or other illness due to poor financial health or lack of insurance. They know the healthcare cost for treatment will be significant and could require high out of pocket costs.
Having a clear understanding of the benefits of any insurance program is key to predicting value. Employer sponsored insurance programs typically come with materials, customer service agents, and online tools to help you navigate and understand your benefits when it’s time to put them to use. However, knowing if an employer-sponsored program is enough or the right kind of coverage for your needs should be a consideration. And where do you find additional supplemental insurance programs to shore up financial health?
For years, consumers have turned to their financial institutions for such programs. As a trusted partner, a financial institution can be the most accessible provider of life and supplemental insurance programs for their consumers. Recuperative Care and Hospital Accident Protection insurance programs, offered by Franklin Madison in partnership with financial institutions, are two such programs. They are accessible supplemental insurance programs that are guaranteed issue and pay the insured a daily cash benefit for each day they are hospitalized due to a covered accident or sickness. These benefits can help consumers pay household bills or cover out-of-pocket medical expenses. Since these products went to market in 2015, average cumulative growth rate of program enrollment has been over 80 percent. Bank and credit union adoption of these programs have been an important part of their focus on consumer financial health because it addresses a consumer need. Leveraging institution data analytics can highlight to the institution what consumers may be financially vulnerable or need access to supplemental or life insurance programs.
Does your financial institution have a holistic approach to financial wellness? Supplemental insurance should be part of your strategy.