Employee Benefits

What Is Supplemental Health Insurance?

2 min read Oct 18, 2022

Many people enroll in a health insurance policy and assume they have enough coverage. However, certain treatments, services, or medical events may not be covered under a primary insurance plan.

Fortunately, supplemental health insurance may help provide coverage beyond the limits of your primary healthcare plan. In this guide, we’ll look at what supplemental health coverage is, how it works, and when it may be a good idea to enroll in secondary coverage.

What is supplemental health insurance?

Supplemental health insurance is a type of insurance that help pay for treatments and services that standard health insurance plans may not cover.

How does supplemental health insurance work?

Some supplemental health insurance plans cover specific services, such as cancer treatments. Others may help reduce the financial burden of a major illness or accident by providing a lump sum of money you can use for medical treatments or household expenses.

Depending on the type of plan you choose, your supplemental health insurance coverage may function differently than your primary health insurance plan. For instance, some plans pay a set amount of money for certain treatments. Others cover a percentage of your costs, which may reduce the amount you owe on a medical bill.

What does supplemental health insurance cover?

Supplemental health insurance plans cover a wide variety of treatments and services, making it essential to find the right plan before enrolling. Let’s take a closer look at some of the most common types of supplemental coverage.

Types of supplemental health insurance

Below, we break down the different types of coverage, including: 

  • Accident insurance
  • Hospital indemnity insurance
  • Critical illness insurance
  • Cancer insurance

Accident insurance

Accident provides coverage for injuries caused by an accident. Most accident insurance plans provide benefits to help cover a range of expenses, including: 

  • Emergency room visits
  • Hospitalization
  • Medical treatments
  • Transportation
  • Insurance deductibles and copays

Many accident insurance plans provide enrollees with a lump-sum payout. You can use the money to pay for costs directly related to medical treatment, like a hospital bill, or indirect expenses like food, hotel stays, or transportation.

Hospital indemnity insurance

Hospital indemnity insurance —also known as hospital insurance—helps cover some or all of the costs of hospitalization. Depending on your plan, hospital indemnity insurance may pay out a daily, weekly, or lump-sum amount to cover or reduce the cost of a hospital visit.

People with chronic health conditions often purchase hospital insurance to offset out-of-pocket costs. On the other hand, otherwise healthy people may enroll in a hospital indemnity plan if they have a family history of heart disease, cancer, or another serious illness.

Critical illness insurance

Critical illness insurance is a type of supplemental plan that offers benefits and coverage after you or a dependent is diagnosed with a serious illness. Also known as specified disease insurance, these plans kick in following a qualifying diagnosis, or a diagnosis of an illness covered by the plan.

After a qualifying diagnosis, your critical illness plan will provide a lump-sum payout. You can use the money for a number of direct and indirect costs, such as medical care, experimental treatments, household expenses, and childcare. 

However, it’s important to remember that a critical illness insurance plan will only cover diseases included in your policy. If your condition isn’t listed, you probably won’t receive a payout.

Cancer insurance

Cancer insurance helps protect you from the financial burden of cancer treatments. Many cancer insurance plans provide flexible, direct payouts you can use for a variety of costs, including:

  • Doctor’s appointments
  • Hospital visits
  • Cancer treatments
  • Household bills
  • Primary insurance deductibles, coinsurance, or copays

Even if you have a good primary insurance plan, it may not offer complete coverage for cancer treatments and recovery. Cancer insurance helps reduce out-of-pocket expenses you might face while recovering.

Where can you buy supplemental health insurance plans?

Typically, you can purchase a supplemental health insurance plan through your employer. Talk with your benefits administrator or human resources representative to determine which benefits are available.

If your employer doesn’t offer a certain benefit, you may be able to purchase supplemental coverage directly from insurance companies.

Is supplemental health insurance worth it?

Supplemental health insurance can be incredibly beneficial. Not only does it provide additional insurance coverage, but it also offers a level of confidence and financial security. 

However, deciding to take out a supplemental health insurance plan is a highly personal decision that depends on several factors, including:

  • Your current and expected financial circumstances
  • Your overall health risks
  • Your age
  • The cost of additional insurance premiums
  • How much coverage you want to have
  • What type of coverage you want 

Feel confident in your coverage with a supplemental health insurance plan

Life is full of surprises—and not all of them are welcome. Fortunately, a supplemental health insurance plan can help you and your loved ones prepare for the unexpected. Get in touch with your employer today to determine which supplemental plans are available to you.

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This article is intended to provide general information about insurance. It does not describe any Metropolitan Life Insurance company product or feature.