Recommendations for catastrophic health insurance

Back story: Mr. Middon took early retirement (yay!). COBRA coverage runs out a couple of months before he is eligible for Medicare. (I’m a bit older so there’s no gap in coverage for me.)

He’s in good health, so we want truly catastrophic coverage for the couple of months. Ideally, what we’d get in insurance for that two months:

  1. The benefit of negotiated rates.

  2. A high deductible – say, $10,000.

  3. We pay full amount of the first $10,000 of bills. (In other words, we’re willing to bet that routine medical expenses will be minimal, to the point that we’d pay 100% of the first ten grand or whatever the deductible would be.)

  4. A very large lifetime maximum payout by the insurer – say, $3,000,000.

It’s the last point that seems to be the problem. There are plenty of companies willing to insure him while we pay a lot of the early expenses, but they want to cap their exposure to something like $600,000. Six hundred thousand is not much if something really catastrophic occurs – my sister-in-law’s mother racked up a bill of $2,000,000 for two weeks in the ICU. (Luckily, between Medicare and her supplemental insurance, they had to pay little.)

So – any recommendations about where he can get the kind of coverage we want?

The answer will vary by state and even by county. My best advice is, ask a broker. They know this stuff inside and out, and they get paid by the insurance companies, so it’s free to you.

It’s unlikely he is going to run up more than $600,000 in expenses in 2 months.

Unlikely, yes. Impossible, no. As I said my sister-in-law’s mother racked up $2 million of health care expense in her last month of life, half of which was spent in the ICU.

Even with it being unlikely, a couple hundred bucks in insurance will allow us better sleep over the two months if we know that a serious accident won’t put us in bankruptcy.

Talk to the agent who handles your house or car insurance. If their company doesn’t offer a plan, they will refer you to some place that does.

Yup, there are “short term” health insurance plans, which may be something close to what Anny Middon is looking for. They tend to not cover a lot, but they’re designed for these kinds of situations. However, you may well find that you can’t get something which has as high of a maximum payment as you’re looking for (even if you’re willing to pay a lot for it).

What sorts of plans are offered, and by which company, varies a lot by state. Talking to a broker isn’t a bad idea; you can also try googling “Short Term Health Insurance [your state],” and see which companies’ plans come up.