What is Supplemental Health Insurance?

Supplemental Health Insurance and Obamacare

Health insurance can be confusing and health insurance under Obamacare can be doubly-so. Add in another layer, like supplemental health insurance products, and it can get even more complicated.

The easiest way to understand the different types of health insurance products available today – including Obamacare and supplemental health insurance – is to break them into three groups:

• Group 1: Major medical health insurance – Major medical is comprehensive health insurance that meets all of the Obamacare rules and coverage standards.
• Group 2: Supplemental medical insurance – This is insurance designed to pay for stuff that major medical doesn’t cover or makes you pay out of pocket for.
• Group 3: Short-term or transitional health insurance – This is health insurance designed to protect you for a relatively short amount of time when you’re in a transition, like a move or job change.

In this article we’ll discuss the different kinds of coverage included in each of these groups. We’ll also talk about some of the related health insurance terms you should know. For example, as a health insurance consumer, you need to understand what terms like “gap medical insurance,” “term medical insurance,” and “deductible insurance” mean.

Group 1: Major medical health insurance

The goal of this article is to discuss supplemental insurance, so we’ll keep this part brief. Major medical health insurance includes any one of the following:

• Group health insurance: Health insurance offered by an employer.
• Medicare or Medicaid: Medicare is primarily for seniors, while Medicaid is primarily for people with low incomes.
• Individual or family major medical health insurance: These are health insurance plans you can purchase for yourself on private insurance exchanges (online brokers) or government-run health insurance exchanges – some people may qualify for government subsidies when purchasing these “Obamacare” plans.

Group 2: Supplemental health insurance and Obamacare

Here is where things get really interesting. Supplemental health insurance products vary greatly from state to state. Every state has its own rules about what can be offered and what has to be covered.

Let’s look at some of the major categories of supplemental health insurance available after the Affordable Care Act (the law commonly known as Obamacare) was implemented:

• What is accident insurance? – Supplemental accident insurance helps cover out-of-pocket medical costs you may face from an accidental injury. Obamacare covers visits to the emergency room and hospital, but accident insurance can help you pay high deductibles if you have them. The insurance company pays you directly rather than the medical provider.
• What is critical illness insurance? – Think of critical illness insurance as a supplemental insurance policy that pays you a lump sum of cash if you’re diagnosed with a covered illness like cancer. People often use these plans to pay rents, mortgages or other expenses so they can take time off of work for treatment.
• What is dental insurance? – Dental insurance is supplemental to major medical insurance because it covers preventive care for your teeth or treatment of cavities. Under Obamacare, major medical insurance would typically cover any trauma or injury to your mouth or teeth. Some Obamacare major medical plans include coverage of dental care for children.
• What is vision insurance? – A supplemental vision insurance plan is typically also a “add on” to other a major medical health insurance plan under Obamacare. Stand-alone vision insurance is about pro-active vision care through checkups and vision correction.
• What is travel insurance? – Travel insurance supplements major medical health plans when you’re on a trip. Plans often cover your medical costs up front and then negotiate with your insurer once you’re safely home.

Group 3: Short-term health insurance

Short-term health insurance is not to be used as a supplemental coverage to Obamacare/major medical health insurance. Rather, short-term health insurance is designed for those who expect to be uninsured for a short period of time.

• What is short-term health insurance? – Short-term health insuranceplans provide coverage for a fixed, but limited, amount of time. They’re ideal for those who may be changing jobs or waiting for major medical health insurance to start. Short-term plans do not provide comprehensive coverage and it’s possible to be declined based on your medical status.
• Does short-term health insurance protect you from Obamacare tax penalties? Short-term health insurance does not meet Obamacare’s minimum requirements for major medical coverage, so short-term medical will not protect you from tax penalties if you go more than two consecutive months without Obamacare-compliant major medical coverage in a single year.
• When do tax penalties apply? Obamacare allows you go without minimum essential coverage for up to two consecutive months, within a calendar year, without charging you a tax penalty. The tax is then assessed on a month-to-month basis for each month you’re uninsured. If you
• Can I buy short-term health insurance outside the Obamacare enrollment period? If you want to purchase an Obamacare health insurance plan, you typically need to do so during the annual nationwide open enrollment period or shortly after experiencing a “qualifying life event.” Short-term health insurance plans can be purchased at any time.

Supplemental Health Insurance Terms You Should Know

Now let’s take a look at some of the terminology used to refer to different kinds of supplemental health insurance plans.

What is gap health insurance for medical coverage? – The term “gap health insurance” can be used a few different ways.

• Financial gaps – Gap insurance is most commonly used to describe insurance that covers your deductibles or out-of-pocket costs. Coverage like this is basically insurance to supplement the financial gaps in your major medical health insurance coverage. When someone talks about medical insurance for financial gaps, they’re likely referring to accident, critical illness or fixed-indemnity types of plans.
• Time gaps – Another way people refer to gap health insuranceis in relation to time. If you have a temporary gap in your major medical coverage, a person may recommend a supplemental or gap health insurance policy to cover you until your major medical health insurance kicks in.  When someone talks about medical insurance for gaps in time, they’re likely referring to short-term medical insurance.

What is deductible insurance for medical coverage? – Deductible insurance is one of the more straightforward ways to describe supplemental health insurance coverage.

• Deductible supplements– Deductible insurance is not an official insurance industry term, but it’s used regularly to refer to insurance that pays your deductibles or other out-of-pocket costs – essentially supplementing your major medical coverage to pay for the financial gaps in your coverage. If a person recommends deductible medical insurance to cover financial gaps, they’re talking about accident, critical illness or fixed-indemnity types of plans.

More about Supplemental Health Insurance Plans

More about supplemental dental insurance – Think of dental insurance as supplemental major medical insurance for your teeth. You pay a specific fee each month (the premium) and that gives you access to specific benefits to take care of your teeth. The typical dental insurance plan covers things like regular checkups, cleanings, x-rays, and other services that protect your dental health. The level of coverage can vary from plan to plan so you want to pay attention to the financial requirements for certain services. Under Obamacare, supplemental dental health insurance does not always cover things like oral surgery, dental implants, or orthodontia.

• How much does supplemental dental insurance cost? For supplemental dental insurance, the average price of a plan is around $35 per month, according to recent reports.
• Does supplemental dental insurance cover orthodontia? Not always. These plans often only cover routine preventive care but some plans will cover orthodontia.
• Does supplemental dental insurance cover dental implants? Not always. Many plans will cover replacements due to dental trauma from an accident or injury, but supplemental dental insurance aims to primarily provide reduced prices for routine preventive care, fillings and other care related to normal tooth decay.
• Does supplemental dental insurance cover oral surgery? Typically yes, under certain circumstances and with certain limitations. If you need oral surgery tomorrow, its unlikely the plan you buy today will cover it. Most plans have waiting periods to prevent customers from gaming the system. Also, the types of oral surgery that are covered may be limited by the plan to those deemed medically necessary. Plans and benefits differ so you’ll want to review plan details.

More about supplemental vision insurance  – A supplemental vision insurance plan is also an “add on” to a major medical health insurance plan, even under Obamacare. A major medical plan will cover injuries and trauma to your eyes, but vision insurance is really designed to get you discounted pricing for things like routine checkups, vision correction (glasses and contacts) and preventive care.

• How much does supplemental vision insurance cost? For supplemental vision insurance, the average plan costs around $18 per month, according to recent reports.
• Does supplemental vision Insurance cover glasses? Not always. Some plans only cover routine preventive care, but others may cover glasses or offer discounts on prescription lenses.
• Does supplemental vision Insurance cover contact lenses? Not always. Some plans only cover routine preventive care but others may cover glasses.
• Does supplemental vision insurance cover corrective surgery? Typically no. If eye surgery is medically necessary, that will typically be covered by your major medical health insurance plan. Some vision-related procedures may be covered under very specific circumstances and with certain limitations, but supplemental vision insurance is generally designed for discounts on routine preventive and maintenance care.

More about supplemental travel insurance – Travel insurance is also supplemental to major medical health plans coverage. These plans are designed to cover you while on a trip, and that coverage can include everything from cancelled trips to medical evacuations, and everything in-between. The benefits to look for when it comes to supplemental travel insurance are 1) medical translation (when you’re in a non-English speaking country), 2) long-term hospitalization (when out of the U.S.), 3) out-of-pocket costs associated with your illness or injury and 4) emergency family extraction, in case of a qualifying emergency when you must leave the country immediately.

• How much does supplemental travel insurance cost? For supplemental travel insurance, the average plan costs around $4 per day, according to recent reports.
• How much is a supplemental travel insurance deductible? You can typically choose your own deductible. The average selected is $92, according to recent reports.
• How much does supplemental travel insurance cover? You can typically choose your own coverage amount, but the average person tends to purchase about $400,000 in coverage, according to recent reports.

Now that you have a deeper understanding on how supplemental health insurance works, you might have a better idea if any of the supplemental health insurance listed above fits your needs and can help you lower your out of pocket costs.