While critical illness insurance plans have been around for decades, they are now becoming more popular as a result of employers shifting more healthcare costs onto their workers, according to Kaiser Health News.
In fact, some of the nation's largest insurers report double-digit annual growth of these plans in the past few years, MPR News reports.
Critical illness policies typically pay a lump sum if someone is diagnosed with a serious illness such as cancer, heart attack, stroke, kidney failure, or needs a major organ transplant. These insurance policies are being offered in growing numbers as people are already looking at high deductibles and other out-of-pocket costs, the KHN article said.
Forty-six percent of workers covered by employer insurance faced a deductible of at least $1,000 in 2015, the KHN article points out. And a recent review found that in many states, more than half the plans available on the Affordable Care Act's online federal marketplace have a deductible of $3,000 or more.
The number of employers with 500 or more workers offering critical illness plans increased from 34 percent in 2009 to 45 percent last year, KHN notes, citing the the benefits consultant Mercer. Employees generally pay for the extra coverage, although sometimes employers contribute to the cost of the premiums.
UnitedHealth Group, the country's largest health insurer, is one company offering critical illness plans to employers and their employees, as FierceHealthPayer previously reported. The company has offered this coverage since 2011 and seen strong growth, MPR News reported.
Since 1999, sales of critical illness policies have risen from $8 million to $381 million a year, according to global insurer Gen Re. "The opportunity for insurers to get in and sell a product that's needed by the consumer but is not fiercely competitive, with 100 to 150 companies competing for the consumer, means that companies can price it at a margin that they think is fair for the risk," Steve Rowley, Gen Re vice president, told MPR News.