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October 25, 2019

Using Supplemental Insurance to Cover Out-of-Pocket Costs

supplemental health insurance

If you’re like most Americans, you probably have health insurance to help pay for your medical expenses. Because those expenses can be extremely costly, especially if you need tests, visit the doctor frequently, or are admitted to the hospital, health insurance can be essential for everyone.

Of course, health insurance often has holes in it, and you’ll more than likely be responsible for paying for some of your medical care. Depending on what your health plan’s deductible and coinsurance are, you could end up paying thousands of dollars for a serious illness or accident.

That’s where supplemental health insurance comes in. Supplemental health insurance is meant to supplement your existing health insurance. There are many options to choose from, including accident, cancer, critical illness, and hospital indemnity insurance. It’s important to fully read and comprehend any policy you buy to understand its benefits and limitations.

Something you’ll probably encounter when receiving medical care is out-of-pocket heath care costs. According to Verywell Health, “some supplemental insurance plans will pay for out-of-pocket medical expenses, such as deductibles, copayments, and coinsurance,”2 while “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.”1 Of course, if you receive a cash benefit, you could choose to use that to pay for your out-of-pocket expenses.

TheStreet notes that out-of-pocket health care expenses are “the expense amounts, as listed in your health care plan contract, that you may expect to pay, with maximum limits,”2 and “if you get seriously ill or suffer a serious injury, the odds of maxing out your out-of-pocket costs rise precipitously.”2 TheStreet also notes that supplemental health insurance could “provide some much-needed protection against high out-of-pocket health care insurance costs, especially so if you have a track record of frequent medical care visits and high health care costs.”

Because the out-of-pocket medical costs you could face if you have a serious illness or accident could be something that would be financially unmanageable, it might be a good idea to look into supplemental health insurance.

If you’re wondering whether supplemental health insurance is right for you, you need to consider your personal circumstances, risks, health, and financial situation. Contact a financial advisor for guidance.

If you think supplemental health insurance is right for you, contact a licensed insurance agent.

  1. Verywell Health, Should You Buy Supplemental Health Insurance?, 2019

  2. TheStreet, What Is Supplemental Health Care and What Does It Mean to Me?, 2019

Categories: Insurance, Supplement Health Insurance

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