We can do better
Why is medical insurance seen by most as an “I’ve got to have it” benefit, while disability income protection is viewed as a “why do I need it” benefit?
I recently came across an article in the New York Times by Margot Sanger-Katz headlined “Getting Sick Can Be Really Expensive, Even for the Insured.” It opens with this sentence: “When you get really sick, the medical bills may not be your biggest financial shock.”
The article goes on to say what we in the voluntary benefits market have known for years: The cost of a serious medical condition is far more than simply the cost of the medical treatment.
In the past few years, there has been a public focus on and debate about the ACA, along with public awareness of the increasing cost of health care. This has distracted benefits buyers (and, evidently, economists) from the reality that medical costs are only part of the loss associated with serious health issues, and that the need for disability income protection insurance is just as basic as the need for medical coverage. In addition, insured products like critical illness and accident coverage can pay benefits to help relieve the financial stress associated with non-covered expenses.
Related: 5 reasons you should be offering accident insurance
The article ends by advocating that politicians think about better ways to protect people against the risk of income loss and related expenses. They act as if it’s the only answer. But we know better, don’t we?
Does the author advocate turning to politics because researchers ignore messages from benefits professionals, or is it because we do not put enough focus on our message? Is the issue with them—or us?
Let’s ask ourselves about our own messaging regarding health-related security needs. Why is medical insurance seen by most as an “I’ve got to have it” benefit, while disability income protection is viewed as a “why do I need it” benefit? Why do we fail to counsel employers to consider disability income protection when this is such a basic need?
If we think we are doing a good job in this area, how can we explain a recent LIMRA study of nearly 1,500 employers which found that only 46 percent offered short-term disability income protection, while just 41 percent offered long-term income protection? Are we really asking employers the right questions and making the right recommendations? Are we reminding them that a well-managed disability income product is backed by claims services intended to help manage the process of helping employees get back to work productively?
In addition, insured income protection products can pay partial income replacement benefits to encourage employees to get back to the workforce and preserve their earning power. Are we reminding employers how cost-effective that is versus the expense of hiring and training a replacement worker? In enrollment communications campaigns, are we effectively educating employees on the value of disability income protection products?
And then there are supplemental medical products. They, too, can help offset some of the expenses associated with a serious accident or illness, and since the benefit is usually paid to the employee, they also cover some of the lost income.
At first, my reaction to the article was to blame “them”—researchers, reporters and the employers and employees who have ignored our messages. But the more I thought about it, the more I asked whether the problem is them or us. I looked in a mirror to find my answer: We can do better.