Supplemental Medical Insurance – What Is Supplemental Health Insurance?


 Supplemental Medical Insurance – What Is Supplemental Health Insurance?

What is a Supplemental Medical Insurance?

Supplemental medical insurance (also known as supplemental health insurance) is healthcare coverage that people opt in to if they don't have, or can't afford to purchase, comprehensive health insurance. A 2016 study showed that more than one in six Americans without access to health care has a supplemental plan. These plans include Coverdell education savings accounts and high-deductible medical plans. They also cover only a limited number of services. For example, serious injury such as those from car accidents would still need be covered by basic health insurance. However, something like infertility could be covered by the supplemental plan if it is not included in basic coverage. This could be a difference between $10,000-$40,000.

What is the Difference Between "Voluntary" and "Mandatory" Insurance?
If someone doesn't want to purchase or want the alternative options to cover their medical expenses they will have to look into supplemental health insurance plans. Other alternatives include traditional health insurance. Traditional health insurance is considered mandatory and if it is not purchased people will have to pay large penalties for not having coverage which can range up to $2,000 per month. The only way for someone who does not have access to affordable health care could be considered because of poverty to have traditional coverage is if the employer or government provided it for free.

Medical Insurance, Traditional Coverage, and Voluntary Coverage
The differences between traditional health insurance and voluntary insurance include affordable options, price caps for major medical expenses that exceed the deductible and co-payments, and whose allowed to waive deductibles in exchange for a large monthly fee ($1 million or more), as well as who can be covered under each plan. A traditional insurance plan is considered mandatory around the world. Though it has been argued that with the Internet people could purchase supplemental health coverage without being penalized by their employer or fined by the government. In a February 2012 report from forobvious reasons this is hard to achieve.

The Path to Having Supplemental Health Insurance
Individuals who are considered "chronically uninsured" will have the additional options of high-deductible health plans. These plans make it easier for people to get medical coverage by requiring higher initial out-of-pocket expenses. Once the annual deductible is met, the patient will have much more coverage from their medical insurance company and won't worry about how they will pay for their medical expenses. Traditional health insurance is considered mandatory while now many countries are moving toward voluntary health care coverage with a high-deductible option.
A January 2004 study showed that 58 percent of individuals worry about having a major illness or injury in case something unexpected happens. The study also showed that supplemental health insurance made it easier to cover large medical expenses, seeing a doctor, and getting regular checkups. With traditional health insurance, U.S. citizens worry about how they will afford the deductible but supplemental healthcare is much easier on the pocket book to pay for extra out-of-pocket expenses. This has always been the goal of supplemental health insurance since its beginning.

When Do People Need Supplemental Medical Insurance?
People need supplemental medical insurance when they get sick or have an injury and their medical bills are in excess of their coverage limits on traditional coverage or when they don't have any coverage at all.

Many people with medical insurance choose to add supplemental medical insurance. 
A September 2012 report from the Kaiser Family Foundation showed that only 41 percent of U.S. adults with health insurance were satisfied with their coverage while 54 percent had issues (many because they had too much coverage). The study also showed that many individuals who get supplemental medical insurance as an alternative to comprehensive coverage or because they are sick would probably forgo it if they could afford it. In the United States, employers and government provide national health care so this is unlikely to happen in the near future.

Supplemental Medical Insurance in the United States
The first supplemental health insurance plan was in the United States and developed in 1967 by Blue Cross and Blue Shield. Supplemental medical insurance was created to help fill gaps of traditional major medical coverage. With traditional coverage, patients have to pay up to 50 percent of the bill for any major medical expense they might encounter through their plan. These expenses are known as co-pays, coinsurance, or deductibles which lead to major medical debt for so many Americans. Many things could be covered depending on one's supplemental policy and these plans became much more popular during the 1980s with employers looking for ways to decrease healthcare costs. A major medical plan will cover hospital expenses but not outpatient care. Supplemental medical insurance is much more flexible in the amount of things it covers while still keeping premiums lower than traditional health insurance. Nowadays supplemental health insurance is sold directly to consumers rather than by employers who often require this coverage as a condition of employment.

Recent Trends in Supplemental Health Insurance
The first plan was created back in 1967 but it wasn't until the 1980s that supplemental health insurance became as popular as it is today. In many countries besides the United States, supplemental medical coverage is sold directly to consumers and employers don't always play a role in providing these plans. As a result, many consumers can afford them with or without employer subsidies. The supplemental health insurance policies of all different types are underwritten by providers which is why they are so affordable.

The most popular type of supplemental health insurance policy in the United States is the low cost short-term plan. This type of plan covers individuals who have an existing medical condition that has been stable for a specified period of time before they need to use the plan (usually one year). They also cover people who have had recent surgeries and other common sicknesses. Once an individual has used their entire benefits they will want to look at traditional health coverage for any additional expenses. Another plan that many employers offer is a corporate health and wellness plan which helps employees stay healthy and provides incentives to do so. Many people have traditional health insurance but non-employers supplement their coverage with personal injury protection or supplemental health insurance plans.

Many cities around the world have supplement insurance plans that provide additional coverage for local hospitals and doctors. In some cases, these policies will cover outpatient care, emergency services, as well as common medications. These types of supplemental medical insurance policies are very important because these people don't pay in to their national system when they are healthy so they don't often qualify for care unless they are seriously ill.

Blue Cross Blue Shield Association (BCBSA)

Supplemental health insurance has been around since the 1960s but it is still increasing in popularity. The demand for supplemental health insurance has increased since the 1980s when employers started pressuring their employees to have some type of coverage plan to avoid large medical expenses. In many countries, individuals buy supplemental plans directly from providers and traditional health insurance is purchased directly by the government. This has made it easier for millions of people to afford supplemental medical insurance policies which help them pay their out-of-pocket expenses not covered under traditional plans.

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