Before you can decide if you should buy supplemental health coverage, you need to understand just what this type of insurance is, what it covers, and what it costs. Then you need to compare what it offers relative to your healthcare needs. As with most things in life, there are situations where supplemental health coverage makes sense, and there are some situations where it just doesn’t fit.
Who Can Buy Supplemental Health Coverage?
Just about anyone can buy supplemental health coverage on the open market. For most people it is used to complement existing health insurance that they are already buying or are receiving through their employer. The concept of supplemental health insurance is that it complements coverage that you already have which might have some holes in its levels of coverage.
How Does Supplemental Health Coverage Work?
If you have medical insurance that pays 75% of the cost for a visit to the doctor, the supplemental health coverage might pay anywhere from zero to all of the remaining 25% that you are responsible for as the insured. This is clearly an advantage, as you could end up having the entire cost of the medical appointment paid by insurance.
As another example, there are companies that advertise extensively about their supplemental health coverage. They talk in terms of paying you cash that you can use for bills or other expenses when you are unable to work due to a medical situation. Some companies pay you, the insured, directly according to the terms of the policy, allowing you to spend the money in any manner that you see fit. Other plans only reimburse for actual medical expenses that would normally come out of your pocket.
What About Insurance for Seniors?
When discussing insurance for seniors, it can be assumed in most cases that the supplemental health coverage is to complement their Medicare Health Insurance. In this situation, there are some similarities to the supplemental insurance that non-Medicare consumers can acquire, but there are also differences.
Once you become eligible for Medicare insurance for seniors, you have some decisions to make relative to how you want to receive your medical coverage. The first choice is whether you want to stick with Medicare Part A and B or whether you are eligible to select a Medicare Advantage Plan, also known as Medicare Part C. If you select a Medicare Advantage Plan for your Medicare Health Insurance, you are no longer eligible for the Medicare supplemental insurance plans known as Medigap insurance.
Selecting Supplemental Insurance for Seniors
If you opt to receive your coverage for Medicare via Parts A and B, you then have the option to add on a Medigap policy. This form of supplemental insurance is designed and governed by the Medicare arm of the U.S. government, but the policies are offered and administered by private insurance companies. There are several standard supplemental plans available to choose from, and it is up to you to review each offering to see what it offers and what it doesn’t.
You can educate yourself about the basics of each supplemental plan, known as Part F, Part G, and all the way to the newly created Part N, at the Medicare.gov website, or by reading the annual ‘Medicare and You’ booklet that is produced each year. Since Medicare defines the Medigap plans, they are standard.
Each private company that offers a policy that meets the criteria of Part F, for example, must meet the Medicare guidelines. The only differences you should see from one company to the next are the monthly premiums and possibly some extras that they have chosen to include above and beyond what the guidelines specify.
Making a Decision to Buy Insurance for Supplemental Health Coverage
As with making a decision on any major purchase, you should weigh the pros and cons of buying supplemental health coverage. You should evaluate what services and coverage you will receive that is above and beyond what your standard insurance policy offers. You should then compare those benefits to the monthly premium cost of the Medicare supplemental insurance. If it makes sense financially, you can afford the monthly premium, and you feel that the value you will receive is greater than the cost, then it makes sense to proceed with the supplemental health coverage.
However, if you are uncertain as to whether you will really get your money’s worth from the coverage or you aren’t sure that the supplemental insurance for seniors gives you enough extra beyond your standard Parts A and B Medicare coverage, then it might not make sense to spend the money.
For some people supplemental health insurance is absolutely the smartest decision they could have made. For others, it ends up being a big disappointment. Of course, this assessment of its success may not come until after the fact. However, if you do a good job of becoming an informed consumer before making a decision on supplemental health coverage, you stand a better chance of being pleased with your decision.
