I sell health plans, but when my auto insurance agent suggested that the Med Pay benefit of an auto insurance policy was the most affordable ‘medical plan’ that she could find, I had to rethink my idea of affordable health insurance.
Med Pay vs. Health Insurance Plans
My auto insurance agent reasoned that since a car accident is one of the most likely reasons that people end up in a hospital, she was comfortable taking a chance that med pay coverage would suffice, especially since that was the best she could afford. That option may be the best for some people. My biggest concern about it was this: Since med pay benefits apply only when you’ve been in a car accident, that means you would be uninsured for medical services that are not related to a car accident. Not many people are comfortable with that, or the relatively small coverage limit. In the long run, it could be the more expensive route.
When does having a traditional health plan make better sense?
Consider a medical insurance policy when the following fits your situation:
• You prefer the peace of mind of having a policy with broader coverage and an unlimited coverage limit. This gives you a bigger safety net and helps protect your house and other assets that could potentially be jeopardized if a major medical situation was to happen.
• You have ongoing treatments
• You have young children. Since kids tend to need doctor visits and prescriptions more regularly, it’s ideal to cover them for more than just car accidents.
• If your family has a history of health conditions
• If you want benefits for prescriptions
To help reduce your premium, consider a health plan that has a high deductible option. Get as high a deductible as you are comfortable with to achieve the monthly premium that fits your budget.
What does med pay cover, and is it right for you?
Basically, it is limited bodily injury protection that is available if you add the benefit to your auto insurance policy. If you get injured as a result of a car accident, the medical expenses that you incur will be reimbursed to you up to the coverage limit that you select for med pay coverage. The amount ranges from $1,000 to a maximum of $100,000, depending on the limit that you select. Coverage will include incidental expenses, like crutches and a wheelchair. It will also pay for funeral costs, if applicable. Med pay is a supplemental benefit. In some states, it’s mandatory coverage. In CA where I live, it’s optional.
For my agent who struggled to afford the high cost of healthcare, purchasing an auto insurance policy and adding med pay coverage at the highest available limit was the best choice. True, it wouldn’t pay for much if something catastrophic was to happen, but since that was the most that her budget would allow, it had to do; it was better than the alternative of not carrying any health insurance.
There are numerous limitations, so be sure to consult with a licensed auto insurance agent or a lawyer, to determine if this alternative is the best route for your situation.
What’s not covered under med pay car insurance?
The benefit under your auto policy will not cover a health condition, per se. Also, it is not designed to reimburse you for sizeable medical expenses, like in the case of a catastrophic event. Below are some common health services that will not be insured under Med Pay:
• Services related to a health disease or condition
• Preventive care
• X-rays and lab work services that are not related to the car accident
• Experimental treatments
• Medical expenses that exceed the policy limit
Additionally, once you settle your auto accident claim, med pay coverage stops paying for your medical services.
Would med pay apply to my family?
Coverage would extend to the policyholder, their spouse, a family member (by blood, marriage, or adoption) who lives with you, as well as anyone who uses your insured vehicle.
Working for a health insurance agent, the most common reason for someone to call me is for help finding an affordable medical plan. Although there are many people I am able to help, there are others I cannot help because the price of health insurance is still too much for some. Med pay coverage may be a good alternative, just be sure you are informed on the restrictions so you can decide what’s best for you. To do pricing and benefit comparisons, contact your insurance agent for med pay rates and your health coverage carrier or broker for standard medical insurance policy premiums. To speak with a Kaiser Permanente Benefits Specialist, call 1-800-514-0958.