The Basics of a Supplemental Health Insurance Plan

supplemental health insurance for health care


What is a Supplemental Health Insurance Plan?

A supplemental health insurance plan is a health care plan that covers anything above and beyond minimum essential medical coverage. Supplemental health plans can provide added medical coverages, or can also be purchased to contribute to paying the costs not covered by the basic health insurance plan, such as co-insurance, co-pays and deductibles. It all depends on the type of supplemental health insurance plan you are looking for.

Here Are a Few Examples of Supplemental Health Insurance Plan Types: 

How Does a Supplemental Health Insurance Plan Work?

Supplemental insurance pay benefits to the insured. The amount of payment and how it is paid out depends on the supplemental health insurance plan or policy.

Although many of the types of plans we listed above are familiar to us, like the idea of dental insurance, some popular supplemental health insurance policies may also be are disease specific insurance such as:

  • for cancer
  • accidental death and dismemberment insurance
  • accident health insurance, and hospital indemnity insurance
  • Medigap (Medicare supplemental health insurance)

Who Should Get a Supplemental Health Insurance Plan?

Do you need supplemental health insurance plans if you already have health insurance? That depends on your risk factors and how much insurance you want, or what you want to be insured for.

Supplemental plans are optional. It is entirely up to you to decide if the benefits provided by a plan are worth the cost in premiums that you will pay.

For Example, if you know that your children will need insurance to cover orthodontic care in the coming years, and buying a better dental plan to supplement your benefits will allow you to get them braces, then you may decide a supplemental dental insurance plan may be worth it.

Another example would be if you know that you could not afford the costs of long term care, or the loss of income if you were diagnosed with cancer, then long term care or critical illness insurance may be a good investment for you to consider.  

Finding a Good Health Insurance Policy

Before you invest in supplemental health insurance, make sure you understand the coverages available in different health insurance plans. If you have a spouse, be sure and check out what coverage you have there by exploring the possibilities with coordination of benefits on your existing plans.

You don't want to duplicate coverage or pay for more insurance than you need. 

Health insurance policies are all different therefore, what they cover and how much they will pay out is different too. Check to make sure you have a good health insurance policy that pays you maximum benefits for a good price.

Supplemental health insurance kicks in to help you pay for what your health insurance does not pay or other expenses. Supplemental health plans like critical illness or disability can also protect you for expenses you could not pay if something happened and you could not make an income to pay your bills. 

Doctors examining xrays supplemental health insurance
Supplemental health insurance plans offer you more options to get the coverage you need for special circumstances. Some supplemental health plans cover critical illness or may help with costs that would not normally be covered by your basic health plan. Image credit: Monty Rakusen/Cultura/GettyImagee

What to Consider When Choosing Supplemental Health Insurance

Some things to consider when deciding if you need a supplemental health insurance plan are:

  • your health risk factors
  • your savings
  • how much insurance you can afford

Your savings should play an important role in your decision to purchase a supplemental health insurance policy. If you were in the hospital for a few weeks or more, would you have enough to cover your other expenses that your insurance would not? Do you have money that you can access through an HSA or FSA? When deciding on purchasing a policy, you need to take into consideration if you can afford it or not. 

Where to Get a Supplemental Health Plan?

Supplemental health plans may be sold by private insurers, they are not generally sold through the ACA healthcare marketplace.

  • Check with your employer to find out if there are any extended benefits on your health plan at work which include supplemental health plan benefits. For examples, may employers may include extended vision, dental or short term disability benefits. If your insurance does not offer this, also check the insurance provided by your spouse or domestic partner, it may make sense to go with their insurance if these additional coverages are available. It is becoming more common for employers offer added benefits as part of an employee retention strategy, so it is worth asking about. 
  • You can contact a private insurer or contact a health insurance broker to search private insurers for you when looking for the best private health insurance plans.
  • For Medicare, you can use to find a plan.

Additional Examples of Supplemental Health Plans 

  1. Critical Illness or Disease Specific Insurance is a type of supplemental health insurance provides a cash benefit paid directly to you if you require treatment for a specific disease such as cancer. Often, the cash can be spent in any way you would choose and getting your benefit would have nothing to do with how much your insurance paid for your medical costs.
  2. Accident Health Insurance or Accidental Death and Dismemberment Supplemental Insurance This type of supplemental insurance typically would reimburse you for medical costs resulting from accidents. Benefits are paid if you die (to your beneficiaries) or are disabled due to a specific accident outlined in the policy. Premiums are usually low and no medical exam is required. Accidents can include car accidents and accidents in the home or at your job. Also, if you lose limbs, fingers, toes, or your vision due to a covered accident, you may be able to collect a percentage of the death benefit.
  3. Hospital Indemnity Insurance: This type of supplemental health insurance provides a daily, weekly, or monthly cash benefit if you are confined to a hospital stay. Usually there is a minimum hospital stay before benefits are paid. The cash benefit is paid in addition to any other insurance you may have. Benefits are usually reduced if you are confined to a mental hospital and often you can find plans through an employer that require no health exam.

Article Sources

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  2. UnitedHealthcare. "International Travel Insurance Plans." Accessed May 19, 2020.

  3. “Mandatory & Optional Medicaid Benefits.” Accessed May 19, 2020.

  4. “What's Medicare Supplement Insurance (Medigap)?” Accessed May 19, 2020.

  5. Aflac. “Supplemental Coverage for Every Need.” Accessed May 19, 2020.

  6. Colonial Life. “Cancer Insurance Coverage and Policies.” Accessed May 19, 2020.

  7. The Hartford. “Voluntary Accidental Death & Dismemberment Insurance.” Accessed May 19, 2020.

  8. American Income Life Insurance Company. “Accident Insurance vs. Hospital Indemnity Policies: What Is the Difference?” Accessed May 19, 2020.

  9. eHealth. “Does Dental Insurance Cover Braces and Orthodontist Services?” Accessed May 19, 2020.

  10. Mutual of Omaha. “The Value of Critical Illness insurance.” Accessed May 19, 2020.

  11. UnitedHealthCare. ”Coordination of Benefits.” Accessed May 19, 2020.

  12. “Private Plans Outside the Marketplace Outside Open Enrollment.” Accessed May 19, 2020.

  13. SHRM. “Voluntary Benefits Now Essential, Not Fringe.” Accessed May 19, 2020.

  14. Colonial Life. “Critical Illness Insurance Coverage and Policies.” Accessed May 19, 2020.

  15. UnitedHealthCare. “Accident Insurance.” Accessed May 19, 2020.

  16. MetLife. “Hospital Indemnity Insurance.” Accessed May 19, 2020.