What Is Supplemental Health Insurance and Should You Buy It?

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Insurance

Most people understand that health insurance is vital to have to get medical care when they need it. However, some don’t realize that their coverage might not pay for all their expenses. Fortunately, there are various options to help fill the payment gaps. 

Getting a supplemental policy is one solution. Below we look at what it’s all about and why you should consider purchasing it.

What Is Supplemental Health Insurance?

This type of policy option can help plug any financial shortfalls in your health coverage. Also known as “gap insurance,” it enables you to pay in full for all high-priced medical care. 

It helps with deductibles, out-of-pocket expenses, and underpayments on severe injury or illness. The extra coverage keeps you on top of all your healthcare bills and out of debt. The benefits are likely to justify the cost of supplemental health insurance.

Reasons You Need Supplemental Health Insurance

If you’re not sure whether you need the additional coverage, ask yourself the following three questions:

Is Your Deductible Greater Than Your Savings Account?

Most major medical plans have high annual deductibles, which are $1,000 or more. These also include over $6,500 in out-of-pocket expense limits. Compare the deductible and payable maximum for your health insurance plan against your savings account balance.

Will your savings cover the payable maximum? If not, then think about getting the supplemental package.

Do You Have Children That Might Need Extra Childcare If You’re Ill or Injured?

If you have children, you should consider that they’ll need to be taken care of if you’re ill or injured. Depending on family and friends is not a safe solution, since everyone has their own lives and most people work. 

Daycare costs can rise quickly, especially if it’s for a prolonged period. Extra insurance can help cover those fees so you can focus on getting better.

Will You Be Financially Out of Pocket If You’re Off Work for Illness/injury?

The unfortunate fact is most people have no savings to speak of and live from paycheck to paycheck. Many Americans don’t have enough saved to pay an unexpected medical bill of $1,000. 

A supplemental health insurance package will help pay for your care, so you don’t get into debt for health care reasons. Specific packages also pay out a cash sum, which can be used to cover loss of income.

What Does a Supplemental Plan Cover?

Some insurance packages will pay for the out-of-pocket costs that go with your health insurance plan. This includes deductibles, copayment, and coinsurance. It’ll also cover medical services that your package doesn’t, such as vision care and dental costs. 

Other supplemental policies may provide you with a cash sum paid out over some time or in one lump amount. You can use this cash to cover lost wages, medical-related transportation, food, medication, or any other unforeseen expenses that you have due to the illness or injury.

How Does Supplemental Coverage Work?

The policy is designed to pay benefits to the insured when they get ill or injured. The amount of payment you’ll receive depends on the type of plan. While many packages are familiar, such as dental care packages, some are disease-specific. 

These include coverage for cancer, accidental death, hospital indemnity, and accident health insurance. Specific plans will pay all your medical costs directly to the provider, while others will pay a lump sum to you, which you may use for other expenses.

Different Types of Plans

There are various plans available with many different types of benefits. Some are specific for certain medical treatments, while others are more general. The ones below are the most common:

  • Medicaid or Medicare Supplemental Plans
  • Long term care 
  • Vision insurance plans
  • Dental care packages for adults
  • Critical illness coverage
  • Disability Insurance
  • Short-term health coverage
  • Additional travel policies for healthcare when you’re outside your provider network

Final Thoughts

While everyone knows that health insurance is essential, many people aren’t aware that they might not be covered for all expenses. A supplemental policy is designed to help you fill any shortfalls or gaps that might arise once your medical coverage runs out. 

You’re able to use it to pay for all high-cost medical care or to pay for unexpected costs such as daycare and transportation. There are various plans available for specific treatments, and others are more general, covering more conditions. It’s definitely worth considering the extra purchase. 

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