Major medical health insurance provides crucial financial coverage for most basic medical expenses. However, it is not the only type of insurance available to you. Another insurance is supplemental health insurance, an additional policy you can purchase for more targeted financial protection that extends beyond traditional coverage. Continue reading to learn the differences between major medical health and supplemental insurance and if the latter is right for you.
Major Medical Health Insurance
Major medical health insurance is simply another way to refer to health insurance—namely, those plans that meet the Affordable Care Act requirement for coverage. You can enroll in such health insurance plans through the Health Insurance Marketplace, Medicare, Medicaid, The Children’s Health Insurance Program (CHIP), etc.
From a mile-high perspective, when you get a major medical health insurance policy, you must pay monthly premiums to keep that plan. This plan stipulates it will help you pay for medical expenses when you visit the doctor or get prescriptions from providers within the plan’s network. Note, plans from the Health Insurance Marketplace will always cover ten essential health benefits.
When you receive medical treatment, care, advice, etc., you may pay coinsurance or a copayment, or one of these after paying your deductible. A deductible is the amount you, the policyholder, must pay for covered healthcare services before the insurance company steps in. A copayment or “copay” is the fixed amount you pay for medical expenses, while coinsurance is the percentage of costs you pay.
What is Supplemental Insurance?
Supplemental health insurance is coverage you can buy to (as the name suggests) supplement your major medical health insurance plan. A supplemental insurance policy will include a list of coverage for medical conditions, circumstances, events, and diagnoses not found in traditional health insurance plans:
- Accident
- Critical illness
- Dental
- Vision
- Cancer
- Disability
- Hospital indemnity
- Travel
- Medicare gaps
Supplemental insurance policies come with pre-determined maximum benefits. The plan may pay a flat fee, a percentage of costs, or a stated limit to cover these benefits. You will typically pay your share as one lump sum or in separate, smaller amounts.
There are dozens of supplemental insurance plans available to you—some of the top providers include companies like Aflac, Allstate, and MetLife. Also, your employer might offer supplemental insurance plans as a benefits package.
Is Supplemental Insurance Right for You?
You may encounter emergencies or situations with accompanying medical costs that major medical health insurance will not cover. Supplemental insurance acts as a cost gap for these uncovered treatments and events, providing a wider blanket of financial protection for you and your family.
That said, a supplemental insurance policy has limited benefit coverage. It does not cover everyday medical needs and expenses and should not be a replacement for your major medical health insurance policy. The purpose of supplemental insurance is to augment your current coverage.
Your decision to get supplemental insurance will depend on your financial and medical situation and the coverage of your existing major medical health insurance plan. Supplemental insurance may be best if you believe extra coverage will help protect you from an unexpected financial burden.
Get Answers for Your Insurance Questions
It is important to consider your healthcare options and determine what works best for you. Choosing whether to add supplemental insurance can be challenging. Carefully evaluate your health and financial situation to determine which coverage will be most valuable for you in the future.
