True Own Occupation
The Institutionalized Physician
According to the biennial survey by the Physicians Foundation and Merritt Hawkins began in 2012, the percentage of physicians practicing independently is diminishing rapidly. In 2012, their initial report showed that 48.5% of physicians listed themselves as independent practice owners. Fast forward to the latest survey in 2018 and the percentage decreased to 31.4%. Where are these former self-employed physicians going? Most are trending toward hospitals and large clinics, and the percentages almost perfectly contrast those of physicians leaving private practice: for 2018, a staggering 49.1% of physicians identified as either medical group or hospital employees.
Of the physicians trending away from private practice, a clear line of demarcation separates physicians in their first years of practice to those who have an established practice. Approximately 53% of physicians aged 45 and younger worked for a hospital or hospital-run organization compared to only 28.9% of physicians older than 45. While the numbers are clear, the reasons are not. In fact, 34.6% of physicians employed by hospitals do not believe hospital employment is a step in the right direction, with many voicing the opinion that friction exists between employers and physicians, and 46.4% of those polled believe the hospital/physician relationship is somewhat or mostly negative. A report by Accenture noted 36% of physicians stated reimbursement issues caused them to close their private businesses, while an additional 23% listed overhead costs as the main concern. With costs being one of the largest motivators, many physicians are choosing to drop their individual disability insurance policies in lieu of inexpensive or free group insurance offered by their employers. But what seemed like a money-saving option at the time can become a financial nightmare when disability insurance becomes necessary. Considering that 1 out of 4 twenty-year-olds will become disabled before they retire, having the right disability insurance is a necessity.
Differences Between Own Occupation Disability Insurance and Group/Employer-Sponsored Long Term Disability Insurance:
Salary Vs. Salary and Monetary Benefits
If your current salary is based on commission, bonuses, retirement contributions, or other forms of income along with your base salary, the entire amount will be included on an individual disability insurance claim. With Group Insurance, only the base pay is considered.
Group insurance has a very narrow definition of "Total Disability." True Own Occupation Disability insurance gives the strongest definition of Total Disability and allows the insured to work in another capacity in their office, in another medical field, or any other profession outside of medicine while collecting their full disability benefit.
Non-Transferrable vs. Individual Disability Insurance
Group Insurance provided through your employer ends when you break ties with that employer. Individual disability insurance will remain constant whether you change to another employer or decide to open your own practice again.
Group insurance provides a limited definition of "Own Occupation" that when reviewed shows that the restrictions of the coverage only allow the insured to receive their full benefits if they are disabled in their own occupation and are no longer gainfully employed in any other occupation.
With Individual Own Occupation Disability Insurance, the insured is free to procure another form of income while receiving their full Disability benefit from no longer working in their same occupation.
Group insurance rates and benefits fluctuate widely. The original plan offered to new employees may change with every fiscal year. Policy definitions, coverage limits, and fees can change yearly to meet the needs of the group insurance provider. Individual Own Occupation Disability Insurance, is guaranteed where both the rates and policy definitions will not change.
If you become Institutionalized
In the event you decide to transfer from private practice to a hospital-based business, your True Own Occupation Disability Insurance should remain constant in your career. While the lure of free disability insurance may seem appealing the benefit it provides does not replace the need for True Own Occupation Disability Insurance.
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