The Right Stuff

Author: Dave Rengachary, M.D., RGA

Have you ever seen a space capsule return to earth? The astronaut emerges from a cone of scorched metal and shredded foil, only to struggle against the weight of gravity. In many ways, surviving a critical illness is like returning from outer space. Remarkable medical advances enable patients to defeat disease, only to be crushed by the bills piling up at home.


Insurers have taken note, and one innovation – the critical illness (CI) policy – offers a powerful solution to help patients land gently. CI provides a lump sum to help individuals and families pay accumulated expenses, including non-medical bills from lost income, travel, childcare, and more.


It is important to understand the forces driving years of double-digit growth in the U.S. CI market.  Critical Illness helps the insured manage costs, provides vital certainty and offers a simple-to-administer solution to satisfy a real, and growing, need.


Houston, We Have a Problem… and a Solution


In some ways, Americans are victims of our own scientific successes. U.S. patients have a greater likelihood of surviving a medical emergency than ever before. Early in my career, for example, stroke was not considered a medical emergency; there was little physicians could do in an acute setting but provide aspirin. Today, even small hospitals have developed advanced protocols, offer clot-busting agents and, in some cases, can remove the clot.


While we are able to live longer, we are not necessarily healthier when we leave the hospital. Acute outcomes may have radically improved, but treatment of the whole patient has not kept pace. Patients are discharged with ongoing chronic, and often disabling, conditions that can impose severe financial burdens.


Medical costs represent the leading cause of U.S. bankruptcy: 33%-80% of cancer survivors exhaust their savings to finance medical expenses. Up to 34% borrow money from friends or family to pay for care. And many others fall into substantial debt. In a study of colon cancer survivors in Washington State, mean patient debt was $26,860.


Costs are not limited to direct medical expenses. Consider a truck driver who suffers a minor stroke, which becomes apparent due to a seizure. Out-of-pocket costs linked to hospitalization could be relatively low, but if the seizure prevents him from operating a motor vehicle for six months, this driver loses a source of income. Even though physically and cognitively, this patient is close to intact, he or she still suffers financial devastation yet will not qualify for traditional disability or additional medical coverage.


The CI product offers a solution: guaranteed issue without regard to health status, making it easy for the insured to enroll and for the insurer to administer. There is no deductible and the insured chooses how to use lump sum funds. CI products also are designed to complement other accident, hospital and disability products, providing more complete coverage. As the U.S. health system produces increased confusion, CI provides certainty.


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