If you’ve ever dealt with a serious illness, injury or hospitalization, then you know how expensive the resulting medical bills can be. In the United States, medical debt is all too common, with nearly 1 in 10 adults—or 23 million people—owing medical debt. This includes 11 million who owe more than $2,000 and 3 million people who owe more than $10,000, according to Kaiser Family Foundation.1
Supplemental health insurance is a product that’s designed to help protect people from out-of-pocket expenses that often accompany unexpected health events. This coverage is meant to be purchased in addition to primary health insurance—not replace it—and it pays benefits regardless of other plans. Cash benefits are paid directly to policyholders or someone they designate, not to doctors or hospitals, which means the money can be used for ANY NEED, including medical bills, house payments and groceries.
So, who should buy supplemental health insurance? Below we’ll cover three groups of people who could benefit from coverage.
1. People who have employer-sponsored health insurance
Many people get health insurance through their jobs. These policies provide important coverage, but may also leave workers exposed to high out-of-pocket costs.
More than 55% of American private-sector workers are enrolled in high-deductible health plans (HDHPs).2 In 2023, the minimum annual deductible for an HDHP is $1,500 for individuals and $3,000 for families. And those numbers only go up! A deductible is how much someone must pay for covered health services before their policy starts paying benefits.
Workplace health insurance policies also often expose employees to high copayments and coinsurance, which can quickly add up to thousands of dollars in out-of-pocket costs in the event of a serious illness, injury or hospitalization.
With direct cash benefits when they’re needed most, supplemental health insurance provides valuable protection against employer-sponsored health insurance coverage gaps.
2. People who have private or Affordable Care Act health insurance
With gig work and entrepreneurship surging in the U.S., more and more Americans are becoming responsible for their own health insurance and turning to private or Affordable Care Act plans.
These plans can be costly—and can leave people exposed to high out-of-pocket costs. For example, in 2023, the maximum out-of-pocket limit for an Affordable Care Act plan is $9,100 for individuals and $18,200 for families.3 A cancer diagnosis, heart attack or stroke can easily expose someone to high deductibles, copayments and coinsurance until they reach that annual out-of-pocket limit.
Supplemental health insurance provides an excellent solution for anyone who has a private or Affordable Care Act health plan and needs to reduce their financial risk.
3. People who have Medicare
Medicare is federal health insurance for people 65 or older, some younger people with disabilities, and people with End-Stage Renal Disease. Medicare provides good coverage, but it was never intended to cover all of a person’s health care expenses.
Medicare Supplement insurance and Medicare Advantage plans are common solutions that can help people cover Medicare’s coverage gaps. However, these plans pay providers and not policyholders directly, and they still leave policyholders responsible for out-of-pocket costs.
With direct cash benefits, supplemental health insurance is a great complement to Original Medicare, Medicare Supplement insurance and Medicare Advantage plans.
Ready to learn more about supplemental health insurance?
Whether you’re in your working years or retired, supplemental health insurance is a solution for protecting yourself against out-of-pocket medical bills. To learn more, get in touch with one of our agents!
1Kaiser Family Foundation, 1 in 10 Adults Owe Medical Debt, With Millions Owing More Than $10,000, https://www.kff.org/health-costs/press-release/1-in-10-adults-owe-medical-debt-with-millions-owing-more-than-10000/, March 2022.
2Benefits Pro, HDHP enrollment reaches more than 50% of American private-sector workers, https://www.benefitspro.com/2023/02/20/hdhp-enrollment-reaches-more-than-50-of-american-private-sector-workers/, February 2023.
3HealthCare.gov, Out-of-pocket maximum/limit, https://www.healthcare.gov/glossary/out-of-pocket-maximum-limit/, 2023.
LIMITED-BENEFIT POLICIES. Supplemental health insurance has limitations and exclusions. For costs and complete details of coverage, contact an agent.