Health Insurance in Illinois – Scheduled Benefit Plans Are Risky Compared to Major Medicals

Health Insurance in Illinois can mean different things to different people. To some it might mean having everything covered with absolute no out of pocket expense. To others it might mean having a higher deductible major medical catastrophic plan, just to be able to afford health insurance at all. Then there are the so called scheduled benefit type plans, which in my opinion can be very risky. While these plans in my opinion are far from the best I'm sure they do have a very small niche market where they might possibly be a good fit. And I stress very small niche market.

Scheduled benefit health insurance in Illinois plans typically have a scheduled list of procedures and maximum benefits payable in their outline of coverage and in this list they clearly state how much they are willing to pay for each and every procedure. If you're medical bill exceeds the maximum that is listed in the benefit outline you are typically 100% out of pocket. Some carriers limit their surgical benefit to just $ 10,000. Some carriers offer what is called a miscellaneous benefit, which might be limited to $ 50,000. That means if you had a claim that say cost $ 100,000 with $ 30,000 of it being for surgery and you were paid the maximum from the health insurance company it could look something like this. You'd have $ 20,000 out of pocket expense just for the surgery, then you would have $ 50,000 out of pocket expense for the rest of the bill. This is exactly what a scheduled benefit type plan means. That is exactly the reason why they can be so risky.

I've met so many people that have had scheduled benefit type policies thinking they had excellent coverage in place only to find out that when they needed their plan after an illness or injury the plan was virtually non-existent. Health insurance in Illinois can be had without taking all these risks. The main premise for buying such a plan is that they almost always have very easy underwriting. That's logical considering the carrier knows they are not on the hook for much money in the first place. Because the maximum benefit it typically pays out is quite low. If you have a health condition that only a scheduled benefit type plan will cover, in my opinion you would be better off applying for coverage with the state's high risk pool. In Illinois that would be the CHIP plan. It might be a little more expensive than your scheduled benefit plan. But in the long run it might save you several hundred thousand dollars.

If you have any doubts as to if the plan being proposed is a scheduled benefit plan. Ask your agent if it is a major medical policy. If he says yes, get it in writing. How can you be sure? A major medical policy is a policy where after you reach your out of pocket maximum, the carrier pays 100%, not you. Sometimes scheduled benefit type plans are sold as if they were major medical plans, so be careful. Ask a lot questions. When in doubt get a second opinion.

You would be much better off going with a major medical with a very high deductible than a scheduled benefit plan. At least then, you would know what your absolute worst case scenario is. It will clearly state what your max out of pocket will be. With a scheduled benefit plan you can not be sure what your max out of pocket will be, it'll depend on how large the claim is. You could be several thousand dollars out of pocket. Can you afford that? The main thing is to find a reputable agent that specializes in health insurance and has access to a lot of different carriers to choose from. They can take the time and explain the pros and cons of different plans and policies to you so you understand exactly what you're getting. Luckily there is such a person.

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