How to get supplemental insurance?

Supplemental health insurance can fill some gaps.

As the name suggests, supplemental health insurance is designed to “supplement” existing health insurance plans. Supplemental plans don’t replace health insurance. They may help pay for health care costs not covered by a plan or provide additional coverage for specific needs like dental care, vision and long-term care.

Supplemental health insurance fills gaps in a traditional health insurance plan by providing coverage for certain expenses for which you’re responsible. Supplemental plans don’t typically cover medical treatments, such as surgeries or medications.

A supplemental plan may instead help pay health insurance deductibles or copayments, or pay for specific care, such as cancer or critical illness. Supplemental health insurance plans work differently than health insurance plans, but the specifics depend on the plan.

A supplemental policy like dental insurance may help pay for your dental care. Or a policy like critical illness insurance may give you a lump sum payout as reimbursement for the out-of-pocket costs associated with your treatment. This money can be used for any purpose, including medical bills, transportation, childcare, food or housing.

There are multiple types of supplemental health insurance that can provide coverage in different situations. You can purchase supplemental plans to complement your group health insurance or private health insurance policy. The cost and benefits vary depending on the plan and the provider.

Here are some of the most common supplemental health insurance plans available.

If you have an accident that is covered by an accident insurance policy, it can pay for the expenses that your regular health plan policy excludes. Your injury must meet the qualifications based on the accident plan details. Broken bones, burns, concussions and paralysis are just a few examples of covered conditions.

In addition, many accident insurance policies provide a payout in the event of an accidental death. If you pass away and your death is caused by an accident covered by the policy, a beneficiary of your choosing would receive a lump sum payout, similar to a life insurance death benefit.

If you get diagnosed with cancer, having a supplemental cancer insurance policy provides money that you can use for any need. Cancer insurance benefits can be used for:

If you get diagnosed with a qualifying critical illness, a supplemental critical illness plan can help pay for the out-of-pocket costs that your regular health insurance plan doesn’t cover. For example, if you had a kidney transplant, you could use critical illness insurance benefits to pay for your mortgage, groceries or child care while you recover.

Supplemental critical illness insurance generally covers many major illnesses, including:

Most standard health insurance plans don’t include dental or vision benefits. If you want coverage for visits to the dentist or optometrist, consider a supplemental dental insurance or vision insurance plan.

Of all the supplemental insurance policies, dental and vision insurance are two of the most common. These policies cover preventative care (like two dental cleanings per year), as well as other expenses, such as contact lenses or prescription glasses. Dental and vision insurance are usually relatively inexpensive and are sold by many health insurance companies.

Disability insurance provides income replacement if you become disabled and can’t work. You can purchase supplementary short-term disability insurance or long-term disability insurance. The difference between the two plans is how long the insurance company will provide benefits.

To use disability insurance benefits, you must prove your disability, which often requires verification from a doctor or a medical professional. Depending on the disability insurance plan, you may elect to receive compensation on a weekly or monthly basis. You will stop receiving income replacement when your benefits run out or when you can return to work.

Although traditional health insurance plans cover hospitalization, your plan might not cover the entire stay. If your benefits run out, a supplemental hospital insurance plan can provide additional coverage for the portion that’s not covered by your primary policy.

The average cost of a three-day hospital stay is roughly $30,000, according to the federal government’s Healthcare.gov. That can take a big chunk out of your wallet. Hospital insurance, which is also called hospital indemnity insurance, can help pay for the cost of hospitalization.

Depending on the plan, hospital insurance may provide a fixed benefit for an entire hospital stay or it might provide a certain amount of coverage for each day you spend in the hospital.

Supplemental long-term care insurance helps cover the cost of long-term care services, which may be necessary if you are diagnosed with a chronic illness. Some of the expenses that a long-term care insurance policy will pay for include:

To use long-term care insurance benefits, you’re typically required to meet certain criteria. For example, many plans will provide benefits when you can’t perform two out of the six activities of daily living (ADLs), such as bathing, eating or dressing.

The purpose of supplemental health insurance is to provide coverage for certain expenses that a traditional health plan excludes.

Even with the best health insurance plan, you’re still likely responsible for some treatment costs. Depending on the situation, a sudden medical diagnosis can cause financial strain. Supplemental health insurance plans provide a payout to ease the financial burden of these situations.

For instance, imagine that you get into a car accident and have a concussion. A typical health insurance policy would cover at least a portion of the cost of treatment, like an MRI and an overnight hospital stay. However, if the concussion was serious enough that you couldn’t work for a month, disability insurance would provide income replacement during that time.

Supplemental health insurance plans aren’t meant to replace your primary health insurance policy. Your health plan will always provide more robust coverage for medical care, but having secondary health insurance can provide additional funds for the expenses that you would normally have to pay for out of pocket.

Most supplemental health insurance plans are less expensive than regular health insurance policies. However, the cost of supplemental health insurance depends on a variety of factors, including:

The premium also depends on how you purchase the plan. For example, if you get disability insurance through your employer, the premium would likely be subsidized. If you buy a private disability insurance plan, you pay 100% of the premium out-of-pocket.

When shopping for supplemental health insurance, it’s a good idea to get health insurance quotes from a few different companies and compare them.

Some supplemental insurance plans will pay for the out-of-pocket cost-sharing that goes along with your health insurance plan (ie, deductibles, copayments, and coinsurance), or for medical services that your health plan doesn't cover at all, such as dental and vision costs.

Other supplemental plans may provide you with a cash benefit paid out over a period of time or given to you in one lump sum. The cash can be used for:

This article will explain the different types of supplemental health coverage and how you can decide whether they're a good fit for your circumstances.

Whether or not you need supplemental health insurance depends on a lot of different factors, such as what your current health insurance covers and how high your deductible is. Although many supplemental policies are not overly expensive, duplicate coverage may be unnecessary for many people.

If you are under 65 and/or don't have Medicare, your first step is to determine whether you and your family are fully protected with a regular health plan. If you think you need supplemental insurance, ask yourself the following questions:

When looking at that final questions, ask yourself:

There's no one-size-fits-all answer, as it depends on your circumstances and the specific policy you're considering.

Additionally, before purchasing a supplemental policy, be sure you understand its limitations and benefits. For example, it may not cover all the expenses you expected it to, it may impose waiting periods before payments start, or it may contain limits based on how much you paid and for how long.

One of the most common types of supplemental insurance is Medigap, which is sold by private insurance companies to people enrolled in Original Medicare. (Medigap plans cannot be paired with Medicare Advantage plans).

Original Medicare, which includes Part A hospital insurance and Part B medical insurance, covers many, but not all, health-related services and medical supplies. Things not covered by Original Medicare include:

However, even for the medical services that Original Medicare does cover, you still have some cost-sharing expenses:

You can purchase a Medigap policy to cover some or all of those deductible and coinsurance costs that you'd otherwise have to pay yourself under Original Medicare. Without supplemental coverage, these costs can add up, especially if you need extensive outpatient services (such as kidney dialysis) and have to pay Medicare Part B's unlimited 20% coinsurance for all of it.

Medigap plans don't cover costs for services that Original Medicare doesn't cover at all, such as custodial long-term care or dental services. One exception: Some Medigap plans pay 80% of the cost of emergency care you may need while traveling outside the U.S., which is only covered by Original Medicare in limited cases.

If you're enrolled in Original Medicare (Parts A and B) and have a Medigap policy:

Without Medigap (or other supplemental coverage, such as an employer-sponsored plan or Medicaid), there is no cap on how high your Original Medicare out-of-pocket costs can get, which is why most Original Medicare beneficiaries maintain some type of supplemental coverage.

The Medicare Part B deductible tends to increase from one year to the next but remains much lower than out-of-pocket costs under many other types of health insurance. And it's much lower than the Medicare Part A deductible that applies if a person needs inpatient care (the Part A deductible is $1,556 in 2022).

Although Medigap is a common form of supplemental medical coverage, it's only available to you if you have Original Medicare coverage.

There are many other types of supplemental health coverage that are available to people who have other types of health insurance. Your employer may offer them as a voluntary benefit, or you can purchase a plan directly from an insurance company.

Dental and vision care are generally not included in health plans for adults.

Original Medicare doesn't cover routine dental and vision (but many Medicare Advantage plans do) and most commercial health insurance plans don't, either.

To get dental and vision coverage, you can enroll in a separate plan that covers dental and/or vision care. Employers often offer this as a supplemental coverage option for employees, with the employer paying a portion of the premiums.

If you don't have the option of employer-sponsored dental and vision coverage, you can purchase coverage through the private insurance market.

The Affordable Care Act requires individual and small group plans to provide coverage for pediatric dental and vision services. Insurance companies may incorporate dental and vision into a medical plan or offer them as a separate plan.

Critical illness insurance, also known as disease-specific insurance, is meant to ease the financial burden of a serious illness such as cancer.

These policies may provide a lump-sum cash benefit to help you pay for additional costs that are related to your illness but not covered by your regular health plan or disability coverage. The money can then be used to pay for various expenses, including:

Critical illness plans generally have a very specific list of diagnoses that will trigger a payout. If you get seriously sick with something that isn't specifically listed on your policy, the plan won't pay you anything—even if you incur substantial out-of-pocket costs as a result of the illness.

It's important to understand exactly how the policy works before you purchase it so you're not caught unaware in a tough situation, expecting a payout from your critical illness plan and then not receiving one.

Two kinds of accident policies are available, including accidental death and dismemberment insurance (AD&D) and supplemental accident insurance. They're often combined and sold together. The benefits vary from state to state due to local insurance regulations.

An AD&D policy will pay you a lump-sum cash benefit if you're the named beneficiary of someone who died in an accident. These policies may pay smaller amounts if the person didn't die but lost a limb, went blind, or became permanently paralyzed.

AD&D insurance does not pay for any deaths related to illness, suicide, or natural causes.

Accident medical insurance, also known as an accident indemnity policy or a supplemental accident policy, may pay for medical costs resulting from an accident or injury. Some of these policies may also pay for extended home care services and travel and lodging expenses for family members.

Some accident supplements will just reimburse you up to a pre-determined flat amount ($5,000 is common) if you have medical claims resulting from an accident.

Accident supplement policies are popular with healthy people who have high-deductible insurance plans, defraying upfront premium costs while providing a "backup plan" in the unlikely event of a calamity. The money can then be used to pay the health insurance deductible.

Having an accident supplement in addition to an HSA-qualified high-deductible health plan does not interfere with your eligibility to make pre-tax contributions to a health savings account (HSA).

Hospital indemnity insurance, also known as hospital confinement insurance, provides a cash benefit if you're confined to a hospital due to an illness or serious injury.

The cash benefit, doled out either in one lump sum or as daily/weekly payments, may not start until after a minimum waiting period.

Similar to other types of supplemental insurance, the hospital indemnity coverage is meant to help you pay for services and needed items not covered by your regular health plan.

There are also fixed indemnity policies that pay up to a specified amount for various outpatient services and inpatient care. Again, these plans are not adequate as stand-alone health coverage, as they can leave you with unlimited out-of-pocket costs in the event of a serious medical condition.

Supplemental health coverage can be a useful addition to major medical coverage. Depending on the plan, it may cover some or all of the out-of-pocket costs that a person would otherwise have to pay. Or it might provide coverage for services that simply aren't covered by the major medical plan at all, such as dental and vision care. However, supplemental health insurance may not be necessary, depending on the scope of your major medical coverage and your specific circumstances.

However great the terms of supplemental health insurance may be, the plans are neither intended to stand alone nor replace your regular health insurance. Supplemental insurance is just that: a supplement.

Before signing on the dotted line, make sure you fully understand the benefits and limitations of the policy. If you don't, contact your state's department of insurance for a referral to a consumer advocate or helpline.