Hassle-Free Health Coverage: Calculation of the Comprehensive Benefits

Calculation of the comprehensive benefits would be as follows:

Total Expense: $20,000
100% of the first $10,000: $10,000
Balance of $10,000: ($10,000 - $500 deductible) $9,500 80% of $5,000: $ 4,000
100% of balance ($4,500): $ 4,500
Total paid by comprehensive plan: $18,500

Total benefits provided by the comprehensive plan are $18,500 which is the same 92 percent of covered expenses we saw with the regular major medical plan. In other words, as long as the expenses exceed the package of first dollar benefits ($10,000) and the deductible and coinsurance amounts (an additional $5,500), there is no difference in the benefits provided.

There usually will be a difference in the premium, since a higher premium will be charged for the first dollar benefits in the plan. You are getting into your insurance company's pockets immediately (up to $10,000) when a claim is incurred; so you will have to pay for this by means of a higher premium.

A regular major medical plan will do essentially the same job as the higher-priced comprehensive plan, unless the claim is relatively small ($10,000 or less). The first dollar benefits will cover the relatively small claim without any deductible or coinsurance.

In small claim situations, the extra premium for the comprehensive plan has to be weighed against the likelihood of a small claim of a few thousand dollars. By today's health care costs, it is difficult to spend a few days in a hospital, have surgery and not incur expenses exceeding $10,000.