Supplemental Insurance

What is Supplemental Insurance?

Supplemental insurance is any policy that you have in addition to your main health insurance coverage.

Supplemental policies may improve the medical coverage you already have. They may cover a different set of services, such as dental care. They may also function in different ways, such as paying out a set price if you need treatment, rather than paying a percentage of the medical bill.

Plans can protect against the financial burdens caused by catastrophic illnesses and accidents. For example, let’s say that you end up in the hospital for three days. With a typical health insurance plan, your portion of the bill could be a few thousand dollars. The supplemental plan could help pay for your costs, potentially reducing your portion of the bill down to a few hundred dollars.

There are many types of supplemental plans, some of them specific to certain diseases and conditions. For example, consumers can purchase supplemental cancer insurance to help pay for cancer-related screenings and treatments. Women can buy supplemental insurance for pregnancy to defray costs of prenatal care, labor and the birth of a baby. (These policies must be purchased before conception.)

Medicare supplemental plans, also called Medigap, are a separate category of supplemental plans that provide additional coverage beyond Medicare. With Medicare Part A (hospitalization) and Medicare Part B (medical care), you’d typically pay 20% of your health care costs. Adding a supplement plan would reduce or eliminate your medical costs.

These supplemental plans are only available to beneficiaries enrolled in traditional Medicare. Plans are labeled A through N, the letters denoting the extent of coverage as well as the costs of each plan.

Types of supplemental insurance

Below are descriptions of some of the most popular supplemental plans and what to consider when shopping for coverage.

Supplemental insurance
Who it’s best for
Helps pay for medical bills
Fixed indemnityThose with high-deductible health plans.
Hospital insuranceThose with ongoing health conditions.
Accident insuranceThose who have a high risk of injury such as athletes.
Critical illness insuranceThose who are older or who have a high-risk of specified illnesses.
Long-term care insuranceThose who want to be prepared for the high costs of aging.
To prepare for death or disability
Supplemental life insuranceThose who want extra financial protection for family members.
Accidental death insuranceThose who have high-risk jobs.
Disability insuranceThose who want to protect against sudden income loss.
Provides add-on benefits
Vision insuranceMost people who want an annual eye exam and discounted lenses.
Dental insuranceMost people who want regular cleanings and discounted dental care.
Orthodontic insuranceThose who expect to need braces.