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Bottom 50 Club: Reducing Exposure with Supplemental Health Products


What Health Insurance Plan is Right for Me?

During the fourth quarter, this is the number one question we get asked. While there are a number of important factors to consider, one of the least understood is how much healthcare the average person consumes (or is likely to consume) in a given year. The Agency for Healthcare Research and Quality (AHRQ) conducts an annual Medical Expenditure Panel Survey to gain insight into the distribution of medical expenses in the US. Recently, they released the 2013 results.

The Uneven Distribution of Medical Expenditures in the US

The bottom line? Medical expenditures in the US are highly concentrated. In fact, 5% of the population accounts for more than half of the consumption of the $1.4 trillion spent in 2013. In the same survey, the researchers discovered the bottom 50% of the US population accounted for only 2.9% of all medical expenses in 2013 with a mean expenditure of $253. [1] Are you a member of the “Bottom 50 Club”? If you are, the most relevant question may be not how much the plan covers, but how do you best cover your exposure for an unusual spike in consumption in the upcoming year?

Protecting Yourself With Supplemental Health Products

When employees compare their medical plan options using the simple criteria of cost versus exposure, they often find the best plan choice is the one with the highest exposure. For employees that are members of the ”Bottom 50 Club”, these plans can be especially attractive. This is especially true given that 3 out of 4 members of this club remain in the club from year to year.

But for those who are risk averse (and have disposable income to spend on additional insurance), what is the best way to cover the risk that they will consume more healthcare in the coming year? Supplemental health products such as Critical Illness, Accident, and Hospital Indemnity plans play an important role for these employees. They tend to provide more coverage per premium dollar than richer medical plan options, and also provide protection for non-medical expenses often associated with accidents and illnesses. However, employees are challenged to understand how these plans work with their medical plan options to cover the risk.

Finding the Right Healthcare Plan For You

Helping employees understand their potential use of healthcare and how supplemental health products interact with medical coverage are two cornerstones of our advanced decision support platform: SmartBen Pathfinder. For tens of thousands of employees, this tool has become important in helping answer the question – “What plan should I be in?”  



[1] 96.9% of the bottom 50% of healthcare consumers are under 65.


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