In our quest for the best affordability to benefits ratio, we often overlook essential aspects of our health insurance plan. Supplemental health insurance should make financial sense for a lot of consumers, especially since basic health insurance plans don’t cover the costs associated with all medical events.
Just as life or flood insurance, supplemental health insurance belongs to the category of risk management products and must be treated as such. So when looking at your own risk-management perspective and the likely events you may fear, figuring out your comfort level is essential before searching for supplemental healthcare options.
Basically, supplemental insurance acts as additional insurance which covers the services and expenses not taken on by regular insurance plans. It shields you from unexpected, unwanted illness-related costs. While some of them pay for deductibles, co-payments, out-of-pocket medical expenses or co-insurance, others can provide their customers with cash benefits.
Everything from transportation costs arising from a particular health condition (or its treatment requirements), paying for food, medication and additional expenses connected to that particular medical issue.
Who Needs Supplemental Health Insurance?
Any type of supplemental health insurance plan is merely optional and should reflect your personal medical needs. With that in mind, there are some general guidelines as to the necessity of additional health insurance.
- Americans under the age of 65 are sufficiently covered by major health insurance plans and generally don’t require additional insurance
- Filling coverage gaps is required for individuals and families with fixed-benefit or short-term health insurance policies
- Although children under the age of 18 benefit from dental and vision plans, such expenses are not covered on most adult medical plans
- Remember in-network coverage: not all healthcare plans cover their customers outside specific regions. Travelling, therefore, should be preceded by the acquisition of supplemental health insurance.
- Seniors should consider supplemental programs to their Medicaid plans
Navigating the “Medigap”
Addressed to those enrolled in Medicare, Medigap may be a worthwhile solution if their original Medicare plan cannot cover the costs of particular situations. This Medicare supplemental health insurance plan is added to the two-part (Hospital and Medical insurance) Medicare plan.
A normal Medicare policy only covers 64% of a person’s yearly healthcare costs, so that, in the end, a typical household of two end up suffering the costs of co-insurance and co-payments. Official estimates reveal that a couple will need approximately $250,000 for the medical expenses not included in their original Medicare policy.
When you think of it, a quarter of a million dollars is a hefty sum to pay, especially considering that you’re already insured. This is precisely why you should consider supplemental health insurance for Medicare.
Although Part A-Hospital Insurance and Part B-Medical Insurance cover a wide range of medical costs, services and supplies, there are certain “gaps” which are not paid for by Medicare. Acquiring Medigap will ensure that other costs, from co-payments to deductible costs are also covered.
Different Medigap policies offer different benefits and some may even cover the expenses of health services obtained outside the US. Moreover, preventive services which are not included in Medicare’s coverage area may also be covered by Medigap.
This supplement to your longstanding insurance plan works synergistically. Medicare first pays for those amounts it is responsible for among your healthcare costs. Whatever remains is then covered by Medigap.
There are, of course, pros and cons to Medigap itself. The monthly premium, for instance, varies in accordance to the benefits you choose to receive. Your state of residence will also influence the premiums and, for some policies, age and health state will also represent contributing factors to a premium increase.
When picking out the perfect Medigap coverage plan, be sure to understand the way that Medigap policies are “standardized”. Different policies offer different sets of benefits, so you need to carefully choose which plan works best for your specific need.
This chart details precisely the costs covered by Medicare or yourself. For instance, a hospital stay is generally covered by Medicare (as part of Medical Part A coinsurance) for the initial 60 days. However, this includes an exception for deductibles. For the following days, Medicare covers all but $304 daily for days 61 to 90 and all but double that amount for days 91 through 151.
Medicare Part A costs are covered for those who are actively working and playing taxes while doings so. Buying Part A, though, can cost up to $407 each month. Part B premiums cost $104.90 monthly and Part B deductibles $147 yearly.
While all insurance companies are mandated to offer A plan accompanied by either a C or an F plans when wishing to other any other types, the specific letters describing each individual plan may vary. Plan F is the most expensive option and can come up to an annual premium cost of $2.493 in states such as Connecticut. Compare offers and choose whatever suits you best.
Pre-requisites to be Eligible for Medicare Supplemental Insurance
Any US resident who wishes to enrol for Medigap must first meet the MEC (minimum essential coverage) requirements. Thusly, a Medicare Part A and Part B have to exist before applying for a Medigap plan. Make sure to purchase federal and state regulated “Medicare Supplemental Insurance”.
Applying for Medigap is possible the moment one turns 65, although it is not mandatory. As a general rule of thumb, Medigap programs are mandated to accept you and cover any and all pre-existing conditions in the first six months after signing up for Medicare Part B.
Another positive aspect of Medigap is the fact that past or present health problems cannot represent a reason for insurance companies to charge additional fees. Having acquired Medigap will ensure your supplemental health insurance plan for life. No insurance company can cancel a policy if you continue paying your monthly rates.
Be aware, however, that the situation changes after these first six months after having enrolled in Medicare Part B. After this initial period, you can be turned down based on pre-existing health problems (including cancer, diabetes or heart disease).
In the case of pre-existing condition coverage, Medigap providers may ask their potential enrolees to wait six months before these conditions are covered.
Mind you that the following do NOT qualify as Medigap policies:
- Veteran’s benefits
- Medicare Advantage Plans
- Medicare Part D (Prescription Drug Insurance Plan)
- Employer Plans
- Union Inusrance Plans
- Long-term healthcare insurance plans
- Indian Health Service
- Tribal Health Plans
- Urban Indian Health Plans
Other Types of Supplemental Insurance
While Medigap policies are fairly common and preferred by many, there are other types of supplemental health insurance plans sold across the United States.
Whether you can opt for such policies as voluntary benefits offered by employers or receive them from individual insurance companies, make sure to do your homework beforehand. Get information on specific insurance quotes, apply online for the coverage plans you need and make sure you and your family are well taken care of.
Supplemental Maternity Insurance Coverage
Families that are trying to conceive or have already planned a pregnancy may benefit from supplemental health insurance for pregnancy.
Most family face massive gaps after a baby is born. For one, the lack of paid leave. Facing increased costs with one less income is frightening for most families and medical expenses rise considerably. Additionally, cost-sharing requirements of traditional healthcare plans may pose further difficulties. This is where such a supplemental maternity insurance plan can work in your favour.
Rather than making payments to doctors, hospitals, healthcare providers or gynaecologists, such plans offer direct liquidity payments to you.
Maternity Insurance Plans have to be acquired prior to conception so make sure to include this aspect on your family-planning to-do list.
Critical Illness Insurance
Critical illness insurance, was created as a solution for those people burdened by serious ailments. The financial difficulties arising from debilitating illnesses (including cancer, stroke and heart attack) may be too much to face and supplemental policies can aid in paying for medical costs arising from this specific illness.
More often than not, regular health insurance plans and even disability coverage fail to cover the additional costs related to critical illnesses. Out-of-network specialists, specific treatments, experimental drugs and procedures, deductibles, travel and lodging when treatment options aren’t available nearby- such massive costs can often financially cripple a family.
How does a critical illness insurance plan differ from your regular insurance policy? For one, it covers a plethora of conditions and can include added bonuses (such as life insurance). Disease-specific insurance, for instance, exhaustively covers the costs stemming from a particular illness.
Hospital Indemnity Insurance
This type of insurance plan, also named Hospital Confinement Insurance, provides its customers with liquidity benefits if illnesses or serious injuries force their confinement to a hospital. Such supplemental plans can offer fixed cash benefits for hospital stays as well as ER visits and outpatient services.
The aforementioned cash benefits can either be received as one lump sum or as planned payments (usually daily or weekly sums). Such hospital confinement policies are meant to support families and individuals in covering the costs and medical services not included in their regular health care plan.
Supplemental Dental Insurance
Although children under the age of 18 benefit from dental insurance, adults need to seek supplemental coverage. Separate dental plans can enhance your family’s dental coverage when particular procedures aren’t covered by specific insurance plans.
Certain providers offer specific benefits, from covering yearly deductibles to reducing co-payments and even include coverage for orthodontics and cosmetic treatments (such as whitening or implants).
Accidental Death Insurance Policies
The worst case scenarios anyone can imagine include death and serious, debilitating illness. While it is true that no one wishes to think of such situations, planning ahead must be on anyone’s mind. Accident policies are your best bet when you wish to make sure that your family is well sought-after in the event of unforeseen accidents with catastrophic consequences.
Two distinct accident policies are available to potential customers. Accident Health Insurance and Accidental Death and Dismemberment Insurance cover precise situations of accidental death or dismemberment resulting from accident.
Basically, such policies offer lump-sum liquidity benefits to the beneficiary of the policy in the case that someone is killed during an accident. Different sums are offered when that person suffered debilitating injuries such as eyesight loss, losing a limb or permanent paralysis.
Normally, these two kinds of policies are sold together as combinations.
Companies Offering Supplemental Health Insurance
Because comprehensive coverage isn’t offered by normal policies, you need to understand which supplemental insurance policies cover which precise costs. It’s a matter of getting the most value from his or her chosen supplemental insurance.
AARP supplemental health insurance products, for instance, offer you a wide range of policies and options to choose from. Of course, additional insurance can be expensive and careful research as well as product comparison is warranted.
Think about the odds of actually needing the policy and whether you can realistically cover the costs of yearly premiums. Because each specific insurance plan covers only certain illnesses, cash benefits are only offered to the specific situations meeting the criteria.
Depending on your monthly premiums, the cash benefits differ so that higher amounts of premiums correlate with an increased fixed cash benefit.
Anthem is another company which offers supplemental health insurance options, health family plans and Medicare solutions. The Blue Cross Blue Shield bannered company provides easy access to health plans and information regarding claims, benefits, in-network doctors and even out-of-pocket cost estimates.
You can opt to enhance your Medicare plan with supplemental coverage from other companies such as Humana, CarePlus, Aetna, United of Omaha (a mutual of Omaha) or AARP.
When You Don’t Need Extra Coverage
An objective perspective on your financial situation and healthcare coverage is advisable. While supplemental health insurance represents one of the best options for some, not all Americans require extra coverage.
Direct-to-consumer advertising has helped promote supplemental health insurance and because of exquisite advertising, companies such as Aflac are now the largest supplemental insurance providers in the US.
When considering applying for supplemental health insurance ask yourself:
- Would my current healthcare plan cover treatment costs if a serious accident or illness occurs?
- Can I realistically cover supplemental policy rates?
- Do the extra costs stemming from supplemental insurance make sense?
- Which is the likelihood that a member of my family develops a major illness?
Also consider imposed waiting periods and coverage plan limitations when choosing your supplemental health insurance because signing on the dotted line will, in the end, involve significant financial responsibilities.
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