Dive Brief:
- Employers are increasingly offering critical illness plans, which pay beneficiaries a lump sum if they receive a serious diagnosis such as cancer.
- The growing popularity of the plans is attributed to an attempt to help protect people in the face of growing financial exposure from health plans with high deductibles and other out-of-pocket costs.
- Benefits consultant Mercer reports 45% of employers with 500 or more employees offered the plans in 2015, an increase from 34% in 2009.
Dive Insight:
The rise of critical illness policies comes down to the less generous overall health coverage seen in recent years.
“More employers are looking at the reality of pulling back on the value of health plans but looking to offer something else that would make people feel a little more comfortable about taking on that additional risk,” Mercer's Barry Schilmeister told Kaiser Health News. At the same time, other experts argue the policies are poor compensation for lesser health insurance.
The policies can cover conditions such as cancer, heart attacks, or need for an organ transplant, and sometimes medical issues such as vision loss or paralysis. While on average such plans include about 19 triggers for eligibility, some are specific to cancer. Nine out of 10 critical illness plans are sold through employers, reports KHN.