Supplemental Insurance

As the name suggests, supplemental insurance works in combination with other insurance. It's not designed to stand on its own or provide basic, primary health coverage - and it's not for everyone. Supplemental health insurance can be a good option for those who may want help with medical bills after their primary insurance has finished paying.

Services Covered

When it comes to supplemental insurance, you can get additional coverage for a number of conditions or uses. One type of supplemental plan, hospital indemnity insurance, provides fixed cash benefits for covered services, including hospital stays for emergencies and outpatient services.

There are basic supplemental medical plans that provide fixed benefits for covered preventive medical care. For situations involving a critical condition or illness, there are policies that offer to help pay out-of-pocket expenses for heart attacks, strokes, heart surgeries, cancer and other illnesses.

Again, nearly any condition can be covered under a supplemental policy. The barrier to choosing a type of coverage is cost. What are you willing to pay for these types of additional coverage?

Services Not Covered

Supplemental insurance policies are not intended to be comprehensive coverage.  Therefore, they do not cover the majority of medical costs a person may encounter.  That is why to get the most value from supplemental insurance, a person should also have more comprehensive insurance which will cover the majority of costs.  The supplemental plan can then be used to cover any outstanding co-pays or deductibles left over.  

Furthermore, some supplemental insurance only pays out for specific health events or illnesses.  When shopping for supplemental insurance, one should always read the policy carefully to gain clear understanding of what will be paid under what circumstances.

Coverage Limits

Depending on the policy, supplemental insurance can be expensive. Like any type of insurance, you should do good research before making any purchase. You should also balance the costs of additional coverage against its benefits and ask some tough questions.

  • What are the odds that you will use this policy?
  • How much do premiums cost over the course of several years versus paying cash outright for the medical bills?

Some supplemental insurance only cover certain illnesses or procedures and do not pay out for anything that does not meet that criteria.  Some pay out set amounts for hospital stays or doctor visits.  The amount paid will vary based on the monthly premium you pay.  The higher the premium you pay, the more fixed cash benefits you could receive for hospital stays.