Most people carry several credit cards, and we use them everyday to buy things from coffee to Cadillac’s. Before somebody points this out, you can actually buy a house, or a super yacht, with a credit card …bad financial choice but you “could “do it. But what is really the point of my message today?
Of all the cards we carry which one has the highest limit and lowest pay back rate?
Your medical insurance cards!
You agree to a monthly payment, and the insurance company agrees to an unlimited maximum coverage, that starts the day your card is effective, and you do not have to pay them back. Do any of your credit cards do that?
As a small disclaimer I am primarily talking about major medical plans and mainly coverage offered by employer group plans.
On the day your coverage becomes effective, your medical plan agrees to accept you no matter how sick you might be, no matter what conditions you might already have, and they also agree to provide payment for “eligible covered conditions” no matter how much it costs. And the very best part, you do not have to pay them back for all those payments.
Your right if you noticed there are some restrictions I am not talking about here, like fraud, non-medically necessary claims, and non-network (surprise billing) charges, but generally speaking this is all true.
Here is an example to help make this point.
You get a job that includes medical coverage that will be effective on the first of the month for you and your spouse. Your employer pays most of the employee premium cost, but you pay $900 per month to include your family. Your spouse has a serious illness that will require hospitalization and surgery the day after your coverage starts. After the surgery your spouse will need two years of treatment and a medication that will cost $15,000 per month. Over two years this illness will cost your insurance over 2 million dollars, but your spouse will survive and eventually get well.
At this point you will have paid $900 for the first month and your insurance has already agreed to pay over $2,000,000 for treatment costs, no matter how long it takes, as long as you are covered, and pay the monthly premium for the coverage.
I understand that the cost of medical insurance is high, and many times more than your house payment, but where else can you find anybody who would agree to accept your debt, with very few limitations, and not require you to pay them back?
That is the magic of major medical insurance.