What Is Supplemental Health Insurance? A Guide

blog title card image of wording "supplemental insurance"

Getting Medicare coverage seems like it would be simple, but you need to make sure you get enough coverage to meet your needs at a price you can afford. For those over age 65, Medicare Parts A and B cover hospital visits and doctor visits, but what about everything else? That is where supplemental health insurance picks up those costly extra expenses that seem to increase as we age.

When enrolling in Medicare for the first time, you can sign up at any time during the year based on your birthday. After the initial signup, if you need to make changes to your existing coverage, or add additional health insurance, you must do it during the annual open enrollment period of October 15th to December 7th.

Don’t wait until the last minute. Plan now by learning about additional health insurance you need to cover extra medical expenses as you enter your golden years.


Benefits of Buying Supplemental Health Insurance

Some people think Medicare is free, but that is not true. Medicare Part A is free if you have paid Medicare taxes for a minimum amount of time while working.

If you don’t qualify for free coverage your premiums will be either $259 or $471 per month. There is also a premium of $148.50 per month for Part B. Parts C and D costs vary depending on the plan you select. If your income is above a certain limit, you'll pay an income-related adjustment in addition to your plan premium.

While it may seem costly when you first look at Medicare and supplements, the money it can save you is substantial. When you consider the cost of your deductibles, prescription medications, insurance copay fees, as well as vision and dental care, the savings you get by purchasing supplemental medical insurance is substantial.

When shopping for supplemental plans, review whether the insurance covers additional needs. Some will provide you with a cash benefit that can be used towards lost wages, transportation to receive medical treatment, food, medication, or other expenses related to your illness or injury.

What is Medigap?

The term Medigap stands for health insurance sold by private insurance companies to fill in the “gaps” Medicare does not cover. To purchase a Medigap policy, you must be on Medicare Parts A and B. You will pay your Medicare Part B premium and a premium for Medigap insurance.

Your Medigap policy must clearly state that it is “Medicare Supplemental Insurance” and must follow all federal and state laws. Review the policy to make sure you understand what your costs are and the coverage you will receive. Some policies cover additional benefits that are not available through Medicare.

The way supplemental coverage works is it pays the out-of-pocket costs for services Medicare provides. If you do not purchase a Medigap policy or other supplemental coverage there is no cap on how much your out-of-pocket expenses can be.

Types of Supplemental Health Insurance

Medigap is a type of supplemental medical insurance only available to those who have original Medicare coverage. There are other types of supplemental policies available that do not have this restriction.

Dental and Vision Coverage

Most health care plans in the United States do not include dental and vision care in their policies. Original Medicare does not cover these services either. To make sure you have insurance coverage you need to enroll in a separate plan for these services.

Some employers offer employees dental and vision coverage for an add-on premium. If you do not have coverage through an employer, you may purchase this coverage through private supplemental health insurance providers.

Critical Illness Insurance

Critical illness insurance is sometimes referred to as disease-specific insurance. The insurance helps ease the financial burden caused by your condition. The policy pays a lump-sum cash benefit to help you pay additional costs you incur that are not covered by your standard health insurance or disability coverage.

This coverage generally has a specific list of illnesses it will cover. To receive the coverage you must have a diagnosis shown on the list. If you are still working a better choice might be disability income insurance.

Disability insurance provides coverage for your income loss if you are sick or hurt and unable to work. When wondering whether this type of insurance is necessary, keep in mind that 90% of long-term disability claims are because of illness. Most are not work-related.

Hospital Indemnity Insurance

This type of insurance pays a cash benefit if you become confined to a hospital because of a serious injury or illness. The purpose is to pay for services that are not covered by your regular health insurance plan. They may also pay up to a specific amount for outpatient services.

This type of insurance provides supplemental coverage only and is not a stand-alone policy.

Long Term Care

As you age the need for protection that allows you to maintain your independence is important.  The average person requires 4-1/2 years of long-term care outside of a nursing home, plus an additional 2-1/5 years of care inside a nursing home. Providing for your own care by purchasing long-term care insurance brings you peace of mind.

Accidental Death

Accidental Death and Supplemental Accident Plans provide coverage for accidental death and dismemberment, plus supplemental accident insurance. This type of policy makes a lump-sum payment to the beneficiary named on the policy if the insured dies in an accident. The policy pays a lower amount if the person survives but goes blind, loses a limb, or is permanently paralyzed.

Some of these policies pay for extended home care services or travel and lodging for family members. Many pay a pre-determined flat fee if you have medical claims from an accident.

Things to Remember When Reviewing Your Coverage

Because the open enrollment period is limited and is the only time you can make changes to your coverage, you should always review your options and make sure the insurance you have is providing the best coverage for your needs. Things to consider include:

  • What were your total healthcare costs during the past year?
  • What health care expense did you spend the most money on?
  • What health care services do you use regularly?
  • What pharmacies do you visit?
  • How does the cost of your current coverage compare with other options?
  • Do differences in premiums, deductibles, copays, and coinsurance make changing a financially sound choice?

You also want to check every year to make sure the government or private insurance company is not making changes to the policy that will impact your coverage or costs.

Get a Customized Supplemental Health Insurance Quote

Shopping for Medicare supplement plans is easy with Hummel Group. Concerns about supplemental health insurance costs often keep seniors from seeking out the supplemental coverage they need.

At Hummel Group we have been providing people with insurance plans that fit their needs since 1957. Call us today at 800-860-1060 with any questions. You may also request an affordable customized quote online. Don’t hesitate, contact us today!