Supplemental Health Insurance — What Is It?

Category: Supplemental Health Insurance — What Is It? Originally Posted: February 17, 2015 by Staff Last modified: September 10, 2016

Your health insurance helps make medical care more affordable and offers some financial protection when costly accidents and illnesses strike. Sometimes, though, your health insurance benefits don’t pay for as much as you’d like. And health insurance doesn’t account for other out-of-pocket expenses like, lost income due to time off work, transportation to and from appointments, childcare, alternative treatment, and your yearly health insurance deductible.

Circumstances like a car accident, sports injury, major slip and fall or diagnosis of a major illness are a large reason you might consider supplemental health insurance. Supplemental insurance, also known as gap plans, help with costs your major medical health insurance does not. Think of it as additional financial assistance policy. Supplemental plans often pay out lump sum cash benefits when a covered event occurs putting cash in your pocket to pay for things your insurance plan won’t cover. This type of coverage is meant to complement your permanent health insurance plan, not replace it.

In the age of ever-increasing deductibles, supplemental health insurance plans can offer some relief. High deductible health insurance plans are desirable for many individuals and families because they typically carry lower monthly premium costs. However, most health insurance benefits don’t kick in until you’ve met your deductible, the amount you must pay for covered medical services before your health insurance company begins to pay its share. That means, if your deductible is high, you’re on the hook for more cash out of your pocket before your benefits help with healthcare costs.

Savings shortage

On the flip side, many of us are not equipped to meet our deductible should life throw us a medical curveball. Only 38 percent of respondents to a recent Bankrate Money Pulse poll said they could dip into a savings or checking account to cover unexpected expenses such as a $1,000 emergency room visit—28 percent said they would borrow from family or friends or use credit cards.1 As such, you can see how a high deductible plan may leave most Americans financially strained when they need actually need to their your health insurance coverage.

Supplemental insurance coverage such as the bundled plans those sold through may provide $2,500 to $10,000 in accident coverage, up to $10,000 in critical illness coverage, and $150 a day in hospital coverage up to 30 days.[2] Telemedicine services, vision discount programs, a discount prescription drug card, and term life insurance are also included. These fixed dollar amounts, lump sum payments and additional benefits can be a big help to many individuals and families.

Should you consider supplemental coverage?

Life can be full of surprises at every stage. Some of them are less pleasant than others. Supplemental insurance plans can help ease the burden.

Bundled supplemental health insurance plans available through start as low as $24.95 a month. You are guaranteed acceptance and no medical questions are required.

1 Bell, Claes. “Budgets Can Crumble in Times of Trouble.” Jan. 7, 2015.

2 “Supplemental Insurance.”