Supplemental Health Insurance - The Benefits
What's the big deal about supplemental insurance? After all, most seniors are covered by Medicare, so why do you need extra insurance? The main reason is because Medicare doesn't cover everything. While Medicare certainly helps to pay most of your common medical care costs, Medicare recipients are often left with large medical bills covering costs of certain services that Medicare doesn't cover.
There are several different types of supplemental insurance, including federal supplemental insurance such as MediGap, offered by CMS (Centers for Medicare and Medicaid Services) as well as supplemental insurance offered in individual plans through nationwide health insurance carriers.
Determining which type of supplemental insurance you need depends on your current health as well as your potential future needs. Some supplemental health insurance policies are also known as defined benefit insurance. Most medical policies cover necessary and ordinary medical expenses up to a limit determined by the policymaker. Average medical policies today have a $1 million cap. Supplemental insurance policies help pay for additional costs above and beyond the limit set by your primary policy.
The difference between a supplemental insurance policy and your primary policy, especially one provided by Medicare, is that most supplemental insurance benefits are given directly to the policyholder, as well as pay bills to your doctor or hospital.
One of the most beneficial aspects of a supplemental insurance policy is that the benefits of such policies are not reduced even if you have one or more additional health insurance policies.
MediGap is a type of federal supplemental insurance offered to Medicare members who also have Medicare Part A and Part B plans. MediGap is a supplemental health insurance policy that is added to your basic Medicare coverage and helps to pay things like deductibles, co-pays, supplies, or hospitalization costs not covered by Medicare.
When looking for supplemental insurance, you'll need to balance coverage by costs. Supplemental insurance is considered secondary insurance. Make a list of your current needs as well as needs you may have in the future depending on your health.
Before shopping around for supplemental insurance, understand the coverage and limitations of your current primary health insurance policy.
This will help you fill in gaps without purchasing a type of supplemental insurance that you don't need, and are not likely to need in the future.
Supplemental insurance can help pay costs of extended hospital stays as well as some in-home health care. Be aware of the limitations of your Medicare coverage when looking for a MediGap or national carrier supplemental policy.
Some supplemental insurance plans, such as those offered by MetLife, offer customized retirement planning services for individuals. In addition, some insurance plans offer options such as annuities, mutual funds, IRAs, and other forms of investment.
A supplemental insurance plan should cover disability and long-term care for seniors. Supplemental accidental and disability insurance may also help cover the cost of adult day care services, in-home health care visits by nurses’ aides, nurses, or other in-home health care services, and a number of other senior community services.
Some of the most popular nationwide supplemental insurance providers offer policies their range from $150 a month to about $300 a year. Each offers different features, customer service, and benefits.
For example, AARP offers a supplemental insurance plan for approximately $150 a month, while an individual finding a supplemental insurance policy through Mutual of Omaha may pay an average of $230 a year.
Check around, ask for price quotes, and determine the specific coverage you're looking for when choosing a supplemental health insurance policy. Remember that not all supplemental insurance policies offer the same benefits.
When talking to a health insurance agent or a Medicare representative about supplemental insurance, ask about limitations, coverage limits, and monthly costs, deductibles, and co-pays.