With more employers adopting high deductible plans for their workers, the market is opening up for supplemental benefits in some of healthcare's most expensive areas.
Cancer care policies may be one supplemental insurance product getting new attention, as costs for specialty drugs show no sign of abating. Health and life insurers like Humana and Aflac sell group cancer insurance, helping cover medical costs and offering cash benefits. Even benefits giant Unum is making a push into the space.
Unum subsidiary Colonial Life & Accident Insurance is out with a new voluntary, indemnity-based group cancer insurance plan being pitched as paying "one of the highest initial diagnosis benefits in the industry."
Like others, Colonial's plans help cover out-of-pockets costs for cancer diagnosis and care before a health plan deductible kicks in. Plans include coverage for experimental treatments, as well as costs for child care, transportation and lodging.
Colonial is also offering employers and employees the choice of riders that cover cash benefits upon diagnosis, progressive payments and hospital confinement indemnities.
Despite premature predictions of decline due to the Affordable Care Act, the new norm of $1,000-plus deductibles under health reform may actually be giving something of a boost to supplemental policies.
Voluntary group benefit plan sales ticked up by about half a billion dollars in 2013, to $6.6 billion, and a majority of brokers and carriers expect more growth, according to surveys by Eastbridge Consulting.
For cancer care in particular, it's an option many employers may be considering to offset the impact of high deductible plans, but not necessarily something all companies will immediately gravitate towards.
"As employers' offerings evolve with more employee financial exposure, supplemental plans, whether for cancer or accidents, are attracting more interest," said Dave Morgan, a benefits advisor with Morris & Garritano, a Southern California-based insurance broker.
"The supplemental plans' assistance with higher deductibles and some expenses that fall outside normal PPO or HMO benefits can give some peace of mind," Morgan said.
But employers may also be "prudent within context of employees' financial resources and exposures," because for some, buying cancer or accident policies can run the risk of crowding out funding for other needs.