What Is Supplemental Insurance?

You may hear about supplemental insurance when looking into your health insurance options. But what is supplemental insurance, and why should you care?

Supplemental insurance can be a great way to increase your coverage while keeping costs low. We’ll cover the main types of supplemental insurance and how to decide what you need. 

Supplemental Insurance Explained

Supplemental insurance, or secondary or extra insurance, is a type of coverage that individuals can obtain to complement their primary insurance policies. This can include various policies such as critical illness insurance, accident insurance, or dental insurance. 

People typically purchase supplemental insurance to provide additional financial protection when their primary insurance falls short, helping to cover costs their primary health coverage may not fully cover.

Obtaining supplemental insurance is advisable if you anticipate healthcare costs that your insurance won’t cover.

How Does Supplemental Health Insurance Work?

Supplemental health insurance is designed to fill gaps in your coverage. There will be some things that your traditional health insurance does not cover, so you can take out supplemental insurance to cover those medical costs. 

Start by assessing your current health insurance policy and understanding its coverage and limitations. Ensure you know all copayments, coinsurance, deductibles, and excluded services. 

Also, look at the network you can access and if you have any specialists or current care providers who are not covered. Then, once you understand the gaps in your coverage, you can take out supplemental insurance to cover unmet needs.

If you incur medical expenses covered by your supplemental insurance, you should submit a claim to your provider.

Unlike major medical insurance, which pays directly to medical providers, supplementary insurance is paid directly to you, either in one lump sum or with a fixed amount for specific covered treatments. 

Once your claim has been approved, you will get your payout and can use this money to cover any costs not covered by your primary insurance. You can claim the same treatment from your primary and supplemental insurance providers for more financial support. 

Types Of Supplemental Health Insurance

Fixed Indemnity

Fixed indemnity insurance is a form of supplemental health insurance that pays out a fixed sum if you require medical care because of a qualifying condition. The amount is the same regardless of the bills for your medical care, which is why it is called ‘fixed indemnity.’ 

Fixed indemnity insurance covers you in the event of unexpected large medical bills but will also pay for covered expenses up to the maximum annual amount. It is an excellent option in addition to a major medical plan, and they work well together.

Accidents And Injuries

Accident and injury insurance will cover some costs if you are in an accident that results in high medical costs. This is a good idea to avoid paying thousands out of pocket if you are in a car accident or something similar. 

Critical Illnesses

Critical illness cover is a form of supplemental insurance that covers healthcare costs associated with certain critical illnesses covered by your plan. This insurance typically covers things like strokes, heart attacks, organ transplants, and even cancer.

If your family has a history of critical illnesses, it can be a good idea to invest in supplemental insurance to cover you if you contract a critical condition. 

These illnesses result in significant upfront costs and typically require longer-term care, which can strain your traditional health insurance plan. 

Critical illness insurance can work as a cash benefit. You can use your cash payout for things like mortgage payments and grocery bills while you battle illness. 

Cancer Insurance

Cancer insurance is a specialized form of critical illness coverage that will help you if you get diagnosed with cancer. If you have a family history of cancer but no other major illnesses, this may be a good option for you.

Hospitalization

While most major medical insurance plans cover hospitalization, very few will cover an extended stay. That’s why many people choose to have supplemental hospitalization insurance. 

Hospitalization insurance helps to offset the exorbitant cost of hospitalization. It’s important to remember that while health insurance can feel like a costly expense, especially if you don’t have many healthcare costs, the cost of not having it is far higher. 

The average cost of a three-day hospital stay is $30,000, which is financially crippling if you don’t have sufficient health insurance. 

Long-Term Care Insurance

Long-term care insurance is designed for over-65s and often provides more coverage than Medicare. If you want additional flexibility in your retirement years, take out additional private insurance for long-term care.

You can use long-term care insurance to cover a nursing home, in-home care, or adult daycare. Taking out long-term care insurance in your 20s is unnecessary, but the younger you start, the cheaper your premiums will be.

Dental Insurance

Some health insurance plans cover dental expenses, while others do not. While some individuals choose to forgo dental insurance, it’s worth noting that various dental insurance plans with affordable monthly premiums can provide valuable assistance.

Dental insurance plays a crucial role in preventive care, reducing the likelihood of significant dental problems in the future. Some studies have linked poor oral health and heart disease, which is another reason to prioritize dental care. 

Vision Insurance

Supplemental vision insurance can reduce out-of-pocket costs for eye exams and give you the freedom to use an out-of-network provider. It will also likely cover some of the cost of prescription eyewear. 

All ACA-compliant plans provide vision coverage for children, but not all cover adults. If you need glasses, consider the cost difference between paying for vision care out-of-pocket, getting a health insurance plan that covers vision, or getting supplemental vision insurance. 

Disability Insurance

Disability insurance is a type of supplemental insurance that covers part of your salary if you cannot work because of a disability. It provides support if you experience a debilitating accident or illness.

You can get both short-term and long-term disability insurance. Short-term disability insurance generally covers six months or less. It is designed for illness or disability that is short-term and which will allow you to go back to work within six months.

Long-term disability insurance provides financial protection to individuals who are unable to work for an extended period – often until they reach retirement age or recover and can return to work.

You can have a plan that provides short- and long-term coverage or just one. If you have both, your long-term disability insurance will kick in after your short-term coverage expires.

Life Insurance

Some people consider life insurance supplemental health insurance because it covers your family should the worst happen. Enhance Health also supports finding the best life insurance policy, with monthly premiums as low as $10.

Why Choose Supplemental Insurance?

There is a vast range of insurance options. For some people, major medical insurance may be enough on its own. Still, many people find that they need more coverage.

Supplemental health insurance can provide several advantages and address specific needs that your primary health insurance may not fully cover. Here are some reasons why individuals opt for additional health insurance:

Fills Coverage Gaps 

The primary reason for choosing supplemental insurance is so that it can cover gaps in your existing coverage. Examples are vision and dental care, disability insurance, and life insurance. You can also use it to supplement things your insurance covers but with limited funds, like accidents and hospitalization. 

Financial Protection

Supplemental insurance gives you greater peace of mind because it protects you from large and unexpected medical bills. 

Coverage For Specific Conditions

While the ACA means that insurance companies can’t deny you insurance based on pre-existing conditions, coverage is still limited. If you get diagnosed with cancer or have a heart attack, your insurance will likely cover part of it. 

But either you will have to pay a large deductible first, or it will only cover part of your care. If you have a family history of certain diseases, getting a critical illness or cancer insurance plan is a sensible plan. 

Flexible Use Of funds

Another significant benefit of supplemental insurance is receiving the insurance payout directly. You can use it to pay medical bills and other associated costs. 

If you can’t work because of your health, you can put your insurance towards groceries or childcare to make sure that you can manage while dealing with a medical emergency.

Choice Of Coverage Types

Supplemental health insurance comes in various forms, allowing individuals to choose coverage that aligns with their specific needs. 

Affordability

Supplemental insurance premiums are often more affordable than comprehensive health insurance plans. This makes it cost-effective to enhance your coverage without significantly increasing your overall insurance expenses.

Protection Against High Deductibles

The primary way of keeping your insurance premium down is to opt for a high-deductible plan. This means low monthly costs but limited coverage until you have met the deductible, causing significant financial strain. Supplemental insurance can cover medical costs if you’ve not met your deductible. 

How To Get Supplemental Health Insurance

Start by checking if your employer provides supplementary insurance options. Many companies offer dental and vision plans in addition to health insurance. Employer-sponsored plans often work out cheaper, so it is always worth checking there to see your options.

Next, consider the gaps in your current insurance, what your out-of-pocket costs look like, and if there are any specific conditions you want extra coverage for. Consider how high your risk is of various health conditions.

Start researching the supplemental health insurance plans offered by different insurance companies. Don’t just stick with the same insurance company you already have; instead, find the best plan for you. 

Compare the monthly premiums, what is covered, any exclusions, and the terms of different supplemental insurance plans. Check the eligibility requirements to ensure you are eligible for the plans you are considering. 

Finding supplemental insurance that ticks all of your boxes and fits your budget can be challenging. To help, contact an insurance agent or broker specializing in health insurance. They will have a thorough knowledge of what is available and help you to navigate different plans and explore affordable options. Lastly, they can help you with the actual enrollment process.

Comparing Supplemental Insurance Providers

The problem with supplemental insurance is that private insurance companies offer it, and it does not have to be ACA-compliant. This means that everyone is trying to upsell you while not mentioning the limitations of their plan.

When choosing any insurance, go through a broker like Enhance Health, who has your best interests at heart, to get the best insurance at the lowest price. 

Conclusion

At the end of the day, you need to consider your healthcare needs and understand how to get the coverage you need. It may work out cheaper to opt for a more expensive Marketplace plan with comprehensive coverage.

Or you might be better off with a lower premium Marketplace plan and some supplemental insurance. There is no one correct answer, and the best solution for you depends on your unique situation.

Here at Enhance Health, we understand this, and that’s why our trained consultants take the time to understand your specific needs. For health insurance that meets your needs and fits your budget, contact Enhance Health today

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