What Is Supplemental Health Insurance?

Supplemental health insurance can help provide additional protection when it comes to your health. Let’s examine what supplemental health coverage is, how it works, and how to enroll in it.  

What is supplemental health insurance? 

Supplemental health insurance is a type of insurance that helps pay for treatments and services that standard health insurance plans may not cover.

How does supplemental health insurance work?

Some supplemental health insurance plans cover specific services, such as cancer treatments. Others may help reduce the financial burden of a major illness or accident by providing a lump-sum of money that you can use for medical treatments or household expenses. Unlike health insurance, which often pays your healthcare provider, it pays you directly.

It’s important to note that depending on the type of plan you choose, your supplemental health insurance coverage functions differently than your primary health insurance plan. For instance, some plans pay a set amount of money for certain treatments. Others cover a percentage of your costs, which may reduce the amount you owe on a medical bill.

What does supplemental health insurance cover?

Supplemental health insurance plans provide payments that can help cover a wide variety of treatments and services, making it essential to find the right plan before enrolling. Let’s take a closer look at some of the most common types of supplemental health insurance. 

Types of supplemental health insurance 

Below, we break down several different types of supplemental medical insurance: 

Accident insurance

Accident insurance provides coverage for injuries caused by an accident. 

Many accident insurance plans will provide you with a lump-sum payout, and the amount isn’t dependent on how much you may have received from any other insurance policies. Better yet, you can use the money to pay for costs directly related to medical treatment, like a hospital bill, or indirect expenses, like hotel stays, childcare, or transportation.

Accident insurance plans provide benefits to help cover a range of expenses, including: 

• Emergency room visits
• Hospitalization
• Medical treatments
• Rental cars or fuel
• Lodging
• Childcare
• Food
• Insurance deductibles and copays 
  

Hospital indemnity insurance 

Hospital indemnity insurance — also known as hospital insurance — helps cover the costs of hospitalization. 

Depending on your plan, hospital indemnity insurance may pay out a lump sum upon admission, and then a per-day amount to cover or reduce the cost of a hospital visit. This applies to general hospital stays, as well as intensive care units and inpatient rehab stays.  

People with chronic health conditions often purchase hospital insurance to offset out-of-pocket costs. On the other hand, otherwise healthy people may enroll in a hospital indemnity plan if they have a family history of heart disease, cancer, or another serious illness. 

Critical illness insurance

Critical illness insurance is a type of supplemental plan that offers benefits and coverage after you or a dependent is diagnosed with a serious illness. Also known as specified disease insurance, these plans kick in following a qualifying diagnosis, or a diagnosis of an illness covered by the plan.

After a qualifying diagnosis, your critical illness plan provides a lump-sum payout. You can use the money however you see fit, such as for medical care, experimental treatments, household expenses, and childcare.  

However, it’s important to remember that a critical illness insurance plan will only cover diseases included in your policy. If your condition isn’t listed, you probably won’t receive a payout.

Cancer insurance

Cancer insurance helps protect you from the financial burden of cancer treatments. Many cancer insurance plans provide flexible, direct payouts you can use for a variety of costs, including:

• Doctor’s appointments
• Hospital visits
• Cancer treatments
• Household bills
• Primary insurance deductibles, coinsurance, or copays

Even if you have a good primary insurance plan, it may not offer complete coverage for cancer treatments and recovery. Cancer insurance helps reduce out-of-pocket expenses you might face while recovering. It may also provide recurrence benefits if the cancer returns.  

Where can you get supplemental health insurance plans?

Typically, you can purchase a supplemental health insurance plan through your employer. Talk with your benefits administrator or human resources representative to determine which benefits are available. If they are, you can sign up for, add, or change your insurance benefits during open enrollment. Workplace open enrollment usually runs through October and November. But it may start as early as August depending on your employer. Any new coverage you add during this time will kick in on January 1.

If your employer doesn’t offer a certain benefit, you may be able to purchase supplemental coverage directly from insurance companies.

Is supplemental health insurance worth it?

Supplemental health insurance can be incredibly beneficial. Not only does it provide additional insurance coverage, but it also offers a level of confidence and financial security. 

Deciding to take out a supplemental health insurance plan is a personal choice that depends on several factors, including:

• Your current and expected financial circumstances
• Your overall health risks
• Your age
• The cost of additional insurance premiums
• How much coverage you want to have
• What type of coverage you want 

Feel confident in your coverage with a supplemental health insurance plan

Life is full of surprises. Fortunately, a supplemental health insurance plan can help you and your loved ones prepare for the unexpected. Get in touch with your employer today to determine which supplemental plans are available to you.