Supplemental Health Insurance for Beginners

Supplemental health insurance is quickly becoming a necessity. Had I known about it a few short years ago I would have bought it immediately. Hindsight is 20/20.

What is it?

Supplemental health insurance is designed to pick up where your normal health insurance leaves off. It can cover medical procedures, experimental treatments, dental work, and vision care among other things. It can also cover your out of pocket expenses, deductibles and copays associated with your other insurance plan, as well as lost wages, transportation to treatment centers and even child care.

Who needs it?

Anyone with a high deductible or copay on their primary plan, anyone with a family member who has special needs such as a history of heart disease or no sick leave. If a major illness would wipe out your personal savings or your HMO or PPO provides reduced reimbursement if you go out of network you should also consider supplemental health insurance.

Case Study

Let's look at my health plan a couple of years back. We had a PPO with a fairly high deductible, a 20% copay for all expenses including hospital stays, and a 10% penalty for going out of network. My husband and I were in good health, my pregnancy was progressing with no problems, our savings account was growing slowing after paying for our wedding, new car, and college loans. Should we have bought supplemental health insurance? Yes. Did we? No. Guess what happened? I went into premature labor, while on vacation. Oops. We lost wages, wiped out our savings account, and owed 20% of my daughter's week long NICU stay. We weren't penalized because it was an emergency, but 20% was still a lot.

We learned our lesson though. With my second pregnancy we were prepared, and lucky. I was on bedrest for 3 months, delivered 2 months early, and our son spent two weeks in the NICU. We saved about $20,000.

Ways to Save

Finding the right supplemental carrier is just as important as choosing your primary health care plan. Compare several plans, look at what they cover and how much they cost. Try to purchase them through your employer or any membership groups you belong to such as your credit union or AARP to save money.

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