Finance Mozo

Supplemental health insurance offers flexible and far-reaching programs that serve the policyholders well. When other insurances do not seem comprehensive enough, supplemental insurance can be used to fill in the gaps.

Most Americans use Supplemental health insurance when they turn 65 and choose to use Medicare as their primary health insurance carrier. Health insurance providers insist that individuals use the Medicare first. To reduce the individual’s exposure, health insurance carriers offer backup insurance called supplemental insurance.

Medicare pays approximately 80 percent of medical care for certain illnesses. Without supplemental insurance, the patient would be liable for the balance or 20 percent. The Medicare prescription coverage also leaves the patient with more exposure than is comfortable. Again, supplemental health insurance plans have favorable drug coverage.

The way supplemental insurance works is when a patient needs medical care, Medicare covers 80 percent of the expense. Doctors that accept Medicare agree to accept their pre-set rates. After the Medicare payment is made, the patient is left with a 20 percent liability. Supplemental insurance pays the remaining 20 percent less the agreed upon deductible. This coverage puts the private insurer in a secondary position and thus the cost of supplemental insurance is relatively low as compared to full coverage.

The policyholder can choose from a number of riders and deductibles to find the right plan. The important considerations are the amount of the deductible and the type of prescription plan the policyholder selects.

Medicare Part D

Medicare Part D is the prescription plan offered by Medicare. From the policyholder’s position, Part D leaves a lot to be desired. For many, this makes prescriptions unaffordable. Supplemental insurance prescription plans can lower the cost of medications to a manageable level.

Applicants should understand that supplemental insurance prescription plans have a gap or window. The window opens when the insurer has paid $2,600 in medications. At that point, the policyholder must pay the full cost of medications until the annual prescription costs total $4,300. At that point, the policyholder returns to the standard deductibles. If the policyholder does not use more than $2,600 of medication in a year, the window never opens. In summary, supplemental prescription coverage has deductibles for prescriptions but does expose the policyholder to $1,700 above and beyond the coverage. Persons over 65 should make sure they understand their coverage.

While supplemental insurance is a solution for the exposure left by Medicare, it also can be suited for other needs. There are supplemental plans for extended hospitalization and short hospital visits. This form of coverage allows the policyholder to have a private room.

Supplemental insurance plans are especially popular with the self-employed, families with children, the elderly and those who cannot afford a lump sum of medical expenses. Supplemental insurance is a stopgap against the unexpected.

Persons looking ahead to the possibility of long-term assisted living also use supplemental insurance to protect their assets and ensure the availability of service. Without this insurance, a person in need of assisted living facilities will eventually end up paying for these services out-of-pocket or through the liquidation of exposed assets. There are policies that pay for in-home care or for care at assisted living facilities.

Another form of supplemental insurance is private disability insurance. Every self-employed person or independent agent should have this relatively inexpensive coverage. Disability insurance plans are highly flexible. The policyholder can receive money from the insurer if illness causes a loss of income. Disability insurance is really important if the individual’s health deteriorates unexpectedly. Individuals who need their income to meet their obligations cannot be without disability insurance.

Supplemental insurance is also available to persons under 65 but who are concerned about inadequate coverage under their existing policy. To really understand supplemental health insurance, the individual should be aware of their current policy and use this insurance to plug the holes in their existing coverage.

Examples of various supplemental insurance coverage and quotes for these plans are available online. Supplemental health insurance gives the policyholder the peace of mind that proper care will always be paid for and available.