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How Do I Get the Most Out of Supplemental Health Insurance?

Many popular insurance companies advertise supplemental health insurance, which provides additional coverage for costs that aren’t included in your regular health care plan. Supplemental insurance can be a great way to get extra coverage and avoid large, unexpected medical bills. Before buying a policy, though, you should understand how it works, what types of coverage are available, and how you can get the most out of your plan.

Do I Need Supplemental Health Insurance?

The decision to buy supplemental health insurance is entirely up to you. If you’re in good health and have a health insurance policy that provides all the coverage you need, you may not feel like supplemental insurance is worth the cost of the premium.

However, if there’s any chance that you or an immediate family member will need health care beyond what your regular health insurance policy covers, you should consider supplemental insurance. For example, if you expect that your children will need orthodontic care, but your dental plan doesn’t provide much coverage, you may want to look into a supplemental dental plan. If you know that you can’t afford the lost wages and cost of long-term care if you were diagnosed with a serious illness, critical illness insurance may be helpful.

It’s impossible to predict the future and having a supplemental health insurance policy can give you peace of mind. You’ll know that if you or a family member has an unexpected medical problem, you won’t have to worry as much about your finances.

What Are the Types of Supplemental Health Insurance?

There are a wide variety of supplemental plans available from many different insurance companies. The best plan for you depends on your current health insurance policy, your anticipated medical needs, and your financial situation. To help with the decision, here is a rundown of the most common supplemental plans.

Medicare Supplemental Insurance

Also known as Medigap, Medicare Supplemental Insurance helps cover costs like copayments, coinsurance, and deductibles, which aren’t covered under original Medicare plans. Medigap plans are sold by private companies, and different policies will provide different amounts of coverage. You must have Medicare Parts A and B to buy a Medigap policy.

Another supplemental option for Medicare policyholders is Medicare Part D, which helps cover prescription drug costs. Some Medicare Advantage plans provide supplemental coverage, too, such as vision care, dental care, and prescription drug coverage.

Critical Illness Insurance

Critical illness insurance provides coverage in the event of a major medical emergency, such as a stroke, heart attack, or cancer. These illnesses require extensive care, so they can quickly drain your regular health insurance plan and your bank account.

Different critical illness plans cover different medical conditions. Some are limited to one specific condition, and others will provide coverage for a long list of illnesses.

Long-Term Care Insurance

Long-term care insurance covers long-lasting, chronic illnesses, or medical disabilities. In most cases, people buy long-term care insurance in their 50s or 60s. You cannot buy a policy if you already have a chronic or debilitating health condition, so many people buy a plan when they start to feel like their risk of health problems is increasing.

Long-term care policies can help you pay for a variety of services. Most will reimburse you for care in the following places:

  1. Nursing homes
  2. Assisted living facilities
  3. Adult day care centers
  4. Your own home

Hospital Insurance

The average hospital stay lasts for five days and costs more than $30,000. Unless your health insurance plan provides excellent coverage, a hospital visit will probably leave you with a large bill.

Hospital insurance gives you a cash benefit after your hospital stay, which you can use toward your out-of-pocket expenses. Some policies only cover short-term stays and are limited to a certain number of days, and others provide long-term coverage.

Disability Insurance

Disability insurance provides you with an income if you have an illness or injury that prevents you from working. Short-term disability insurance usually replaces 60 to 70 percent of your salary, and long-term disability insurance replaces 40 to 60 percent. This money can help you pay for medical care not covered by your health insurance and your lost wages from being unable to work.

Dental Insurance

Many health insurance plans provide limited coverage for dental care for adults, but dental procedures can be extremely expensive. Most dental plans will cover regular checkups, cleanings, and X-rays. They may also cover the following procedures partially or in full:

  1. Crowns
  2. Bridges
  3. Dentures
  4. Dental implants
  5. Periodontics

Vision Insurance

Regular health insurance plans often provide some amount of vision care, but people with corrective lenses or eye issues can reduce their out-of-pocket costs with supplemental vision insurance. Most vision plans cover annual eye exams as well as glasses or contacts. Some also offer reduced rates on LASIK and PRK surgeries. The largest vision insurance provider in the U.S. is VSP, or Vision Service Plan, but other insurance companies offer vision coverage, too.

What Else Should I Know?

It can be difficult to decide which type of supplemental insurance to purchase. Your need for supplemental plans may vary depending on your age, your overall health, and your current health insurance plan.

To narrow down your options, consider the likelihood of you or your family needing different types of medical care that aren’t fully covered by your health insurance. You might decide that vision or dental coverage is the most important, or you may be more worried about coverage for a critical illness or a hospital stay.

Rates for all types of supplemental insurance can vary widely depending on several factors. For many types of supplemental health insurance, the following factors can affect your premiums:

  1. Age
  2. Gender
  3. Overall health
  4. Location
  5. Individual vs. family enrollment
  6. Amount of coverage

Different insurance companies may calculate premiums in different ways, too. Therefore, it’s important to do your research and shop around before choosing a plan. Your coverage could make a major difference in your finances if you suffer from an unexpected illness or injury, so you should choose your insurance plan carefully.

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