Even the best health insurance may not meet all your needs. That’s why you may want to purchase one or more supplemental health plans.

1. What is supplemental insurance?
2. Why would I want to buy supplemental insurance?
3. What forms of supplemental insurance are available?
4. What is accident insurance, and how does it work?
5. What is critical illness insurance, and how does it work?
6. What is hospital indemnity insurance, and how does it work?
7. What is hospital and doctor insurance, and how does it work?
8. What is dental insurance, and how does it work?
9. What is vision insurance, and how does it work?
10. What is life insurance, and how does it work?
11. What is travel medical insurance, and how does it work?

There’s no denying it — health care in America is expensive. In 2022, health care costs in the United States totaled $13,493 per person. It’s no wonder that 1 in 10 Americans have significant medical debt, including 3 million people who owe more than $10,000.

Having health insurance is important for keeping your health care costs down. But even with comprehensive coverage, you can still end up paying a lot of money out of pocket.

You might want to consider supplemental insurance. Below, we’ll explain what supplemental insurance is, the types that are available, and what they cover.

What is supplemental insurance?

Supplemental insurance is optional insurance you can buy in addition to your health plan’s coverage. Think of it as an extra layer of protection on top of your other insurance policies. Sort of like wearing a hat and putting on sunscreen to protect yourself from the sun.

There are many types of supplemental insurance. Some help cover the costs of things such as accidents, illnesses or hospital stays. Others cover care that may not be covered by regular health insurance, such as vision and dental services.

Depending on your plan or the state you live in, some types of supplemental insurance pay your provider, but many pay you directly. And sometimes, depending on your state, you can spend the money you get however you want, not just to cover medical bills. Dealing with medical emergencies is stressful enough.

Do you have questions about supplemental insurance plans? Get more details now, or call a licensed insurance agent at 1-844-211-7730 to discuss your options.

Why would I want to buy supplemental insurance?

You share the cost with your insurance company through copayments (fixed dollar amounts) or coinsurance (cost-sharing percentages). For example, you might owe $25 for a doctor visit (copay) or 20% of the bill for a hospital stay (coinsurance). Depending on what plan you have, you may have to pay a deductible before your insurance kicks in for certain health services.

Even with health insurance, your out-of-pocket costs can become costly if you have an accident or need to stay in the hospital. Supplemental insurance can help you cover some of these out-of-pocket costs. That way, you can focus on recovery instead of worrying about bills.

“A lot of people will get a high-deductible plan, and they’ll get the supplements to help offset that in case something did happen,” says Dawn Freeland, owner of Freeland Insurance Solutions in Portage, Michigan. (A High-Deductible Health Plan, or HDHP, is a type of health insurance plan that has a higher-than-normal deductible.)

The other factor is whether the services you need are covered under policies you already have. For example, adult dental and vision care aren’t usually covered by health insurance. If you need dental work or glasses, a separate dental or vision policy can come in handy (you can also get the 2 policies paired together).

“There are options available for people to lessen their financial responsibilities,” says Eric Starke, director of Starke Financial Services in Fort Lauderdale, Florida. “It’s just a matter of choosing the right plan that’s in your budget.”

What forms of supplemental insurance are available?

These are the most common types of supplemental insurance:

• Accident
• Critical illness
• Hospital indemnity
• Hospital and doctor
• Dental
• Vision
• Term life
• Travel

What is accident insurance, and how does it work?

According to the National Center for Health Statistics, accidents lead to 24.8 million doctor visits and 25.5 million emergency room visits each year. And those accidents can cost you a lot. For example, fixing a broken leg can cost up to $7,500.

Accident insurance can help cover your costs if you’re in an accident. It helps pay for the injuries you suffer and services you get. Injuries covered may include:

• Burns
• Concussions
• Fractures
• Paralysis

Services covered by accident insurance may include:

• Ambulance rides
• Diagnostic services
• Doctor visits
• Physical therapy
• Some surgeries
• Time in the hospital

Accident insurance may also pay your beneficiaries if you die as a result of your accident.

For each injury or service, your plan will pay you a set amount based on the plan you choose, up to $2,500, $5,000 or $10,000, depending on the plan. All costs related to your accident are paid up to your plan limit. Suppose you have the $5,000 plan and you fall off your bike and cut yourself and break your arm. Your hospital bill, which includes cleaning and stitching your cuts, X-rays and setting the broken bone, is $3,700. You have to pay a $250 deductible and will receive $3,450 for the qualifying accidental injury.

What’s covered and how much is paid depends on the plan you choose. Be sure to go over the plan brochure for details.

What is critical illness insurance, and how does it work?

A cancer diagnosis or a heart attack can upend your life in many ways. More doctor visits and procedures can mean more copays or copayments, and they could also result in loss of income due to time away from work. Critical illness insurance pays you a lump sum if you develop a qualifying serious illness.

This cash is yours to use however you want, even for things such as childcare, groceries, utilities or rent. So you can focus on recovery instead of stressing about expenses. And if you can’t work due to your illness, the payout from your plan can help keep you and your family afloat.

Illnesses covered can include heart attack, stroke, life-threatening cancer, organ transplant and coronary bypass. The amount paid might range from $10,000 to $50,000 or more, depending on the plan. Keep in mind that a plan will only cover certain illnesses, as outlined in its details, and often only covers the illness if it is the first diagnosis. There may also be other restrictions and limitations.

For example, you may be subject to medical underwriting, which means the insurer can try to figure out your health status and deny you coverage if you have a preexisting condition. So, if you were already diagnosed with cancer, you’d likely not be eligible for a critical illness insurance plan or coverage for cancer. Be sure to do your research when choosing a plan.

It’s important to keep in mind that critical illness insurance isn’t a replacement for comprehensive health insurance. The average cost of open-heart surgery, for instance, is $137,533 — which is far more than a critical illness insurance plan would cover. However, the critical illness plan can help you cover things like lost wages, travel expenses or other unexpected expenses that come with this type of illness.

What is hospital indemnity insurance, and how does it work?

Hospital stays, whether planned or unplanned, can be expensive. A 3-day stay in the hospital can cost $30,000 on average. Hospital indemnity insurance helps cover costs by paying you a fixed amount of money for each day you’re hospitalized.

Payments might range from $500 to $2,000 per day. If you’re in an intensive or critical care unit, your plan might pay an additional $500 to $2,000 per day. What you’re paid depends on the plan you choose and the state you live in. Limits may apply to how many benefits you get per year. There may also be other restrictions and limitations.

As with critical illness insurance, you can use this money however you want. “This money is paid directly to you, not the hospital,” says Starke. “And it’s free to you to do with as you please, because that’s your money.”

What is hospital and doctor insurance, and how does it work?

Hospital and doctor insurance (also called fixed indemnity insurance) pays doctors and hospitals a fixed amount for common medical services you may use. Unlike accident, critical illness and hospital insurance, this type of supplemental insurance makes payments to the provider, not you.

Hospital and doctor insurance covers things such as:

• Doctor visits
• Hospital stays
• Lab results
• Prescriptions

It may also cover telehealth services. Depending on the plan you choose, it might pay $80 for a doctor visit, $10 for a generic prescription, $50 for an X-ray and $1,000 per day for a hospital stay. Some benefits may get better the longer you have the plan. Limits may apply to how many benefits you get per year. There may also be other restrictions and limitations.

This coverage doesn’t replace traditional health insurance, but it can help cover the out-of-pocket expenses you owe with your normal health insurance plan. And you don’t have to meet a deductible before the plan starts paying.

How do accident, critical illness, hospital, and hospital and doctor supplemental plans compare to one another?

These plans are similar to one another, but they differ in what is covered and who gets paid. Here’s a comparison chart to help you understand the differences:

If you have more than one of these policies, you may get multiple benefits for the same service. “The plans pay out as the plans pay out,” says Freeland. “So, it just depends on how many different plans you want to pay for.”

Another way to check out supplemental insurance plans? Enter your ZIP code to search available plans or call a licensed insurance agent at 1-844-211-7730.

What is dental insurance, and how does it work?

Dental care isn’t usually covered by health insurance. Purchasing a separate dental insurance policy can keep costs down for routine care and major services. Dental insurance works like health insurance: You pay a monthly premium, and your insurance company pays your provider for the qualifying services you get.

As with health insurance, dental insurance plans might have a deductible, copays and coinsurance that you’ll have to pay for out of pocket. They also usually have a cap on what they will pay each year (usually $1,000 to $3,000). Plans may have a preferred network of dentists.

Most plans cover preventive care, such as routine cleanings and exams, and basic services such as simple fillings and extractions. Coverage for major services such as crowns, root canals, oral surgery and bridges may cost more. Some dental plans may also have waiting periods before they pay for certain services. Be sure to read the fine print. Most dental plans have limits on the number of services you get per year. For example, you could receive 2 cleanings and exams per year.

What is vision insurance, and how does it work?

Vision care also isn’t typically covered by health insurance. A separate vision insurance plan will help pay for eye exams and glasses or contacts (some help pay for both). Annual eye exams are always covered.

Coverage for glasses and contacts varies. Standard eyeglass lenses, including bifocal-lined lenses, are typically covered once a year for a small copay ($10). Progressive lenses or other, more expensive options, may be available at discounted rates.

For standard frames, plans may offer an allowance of $150 every year. If the frames you choose cost more than that, you’ll have to pay the remaining balance out of pocket.

Contacts lenses may also be covered with a $150 allowance once a year. Vision coverage plans may also have limited or preferred networks of providers.

What is life insurance, and how does it work?

No one likes to think about their own death. But it’s important to plan for these things to make sure that your loved ones will be financially stable if you die. That’s where life insurance comes in. It pays a lump sum of money to a designated person or people (the “beneficiary”) when you die.

Beneficiaries can use the money for any expenses, including medical and funeral costs, or things such as mortgage payments, travel costs and education for children. “Your life insurance is a comfort for your family, knowing that you left some money behind that could at least help to take care of them while they’re going through a transition,” says Starke.

Life insurance is available as term life insurance or permanent life insurance. Permanent life insurance lasts for as long as you keep paying the premium, and it accumulates value over time. Term life insurance lasts only for a certain number of years (10 or 20 years), but it typically costs much less than permanent life insurance. After that term, you may be able to renew your plan or convert it to a permanent plan.

The benefit amount for a life insurance plan can range from as little as $30,000 to as much as $1 million or more. The higher the benefit amount, the higher your premium. To choose a benefit amount that’s right for you, think about your current (and potential) income and the financial needs of the people you support.

What is travel medical insurance, and how does it work?

Health insurance policies often don’t cover care when you’re traveling out of the country unless it’s an emergency. That’s where travel insurance can help. If you get sick or injured while traveling, it can help you pay medical bills and even pay to bring you home for care (or bring your family to you). It may also include coverage for lost luggage, security evacuation, and accidental death and dismemberment.

Unlike other forms of insurance, travel insurance is temporary and is usually purchased for a specific trip. The cost will vary depending on how many people you’re covering (and their ages), where you’re traveling, and how long your trip is.

Thinking about a supplemental insurance policy? Get more plan details now or call a licensed insurance agent at 1-844-211-7730 to discuss your options.

Sources:

Centers for Disease Control and Prevention. “Accidents or unintentional injuries.” November 5, 2023. Retrieved from https://www.cdc.gov/nchs/fastats/accidental-injury.htm

Centers for Medicare and Medicaid Services. “National health expenditure data.” December 13, 2023. Retrieved from https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/NationalHealthAccountsHistorical

HealthCare.gov. “Protection from high medical costs.” Retrieved from https://www.healthcare.gov/why-coverage-is-important/protection-from-high-medical-costs/ Accessed March 19, 2024

HealthSystemTracker.org. “The burden of medical debt in the United States.” February 12, 2024. Retrieved from https://www.healthsystemtracker.org/brief/the-burden-of-medical-debt-in-the-united-states/

University of Southern California. “The most expensive medical diseases and procedures.” November 17, 2023. Retrieved from https://healthadministrationdegree.usc.edu/blog/most-expensive-disease-to-treat-infographic

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51050-X-0524