Understanding Supplemental Health Insurance: What It Covers

You may already have health insurance through your employer or your spouse's employer or through Medicare. Supplemental health insurance can allow you to fill any coverage gaps in your plan.

Function

• Your basic health insurance plan may come with high deductibles and co-payments that you pay out of your own pocket. Supplemental health insurance can help pay for some of these costs, as well as provide you with income to pay for living expenses if you are unable to work.

Types

• Types of supplemental health insurance include Medigap policies which pay for deductibles and co-payments associated with Medicare Part A and B. Critical illness policies provide a lump sum payment if you are diagnosed with a serious illness such as cancer. Hospital indemnity policies provide a cash benefit if your illness or injury requires a hospital stay.

Considerations

• Supplemental health insurance policies are not always necessary. For example, if you cannot work due to illness or injury, your disability insurance policy from work may provide the needed benefits.