Supplementary health insurance is on the rise

RALEIGH, NC – Millions of people across the country struggle to gain access to health insurance due to out-of-pocket expenses during the pandemic and other circumstances.

Recent data from a 2022 Consumer Credit Report revealed about $88 billion in overdue medical debt.

What you need to know

  • Recent data from a 2022 consumer credit report revealed about $88 billion in overdue medical debt
  • Financial experts say supplementary health insurance products are among the fastest growing employee benefits as health has become a focal point during the COVID-19 pandemic
  • More and more employers are offering supplemental health insurance to ease the burden of out-of-pocket expenses
  • Supplemental insurance is additional insurance you can purchase to help pay for services and out-of-pocket expenses that your regular primary health insurance does not cover

Financial experts say having supplemental health insurance can help ease the burden of out-of-pocket expenses that major medical insurers won’t cover.

Darin Reeser with Securian Financial explained how supplemental insurance works and how it can help.

Occupational insurance enrollment has ended and many of us will have new benefits available in 2023, including supplementary health insurance. More and more employers are opening up supplemental health benefits to help cushion the impact of out-of-pocket medical expenses.

Darin Reeser of Securian Financial explained what these benefits are and how they work.

Q: What is Supplementary Health Insurance?

  • An accident, a serious illness or a prolonged hospital stay are unforeseen events that can turn our world upside down.
  • Thankfully, when they do happen, our primary medical insurance, commonly called health insurance, which most Americans receive through our employers, steps in to help cover the medical bills as we recover.
  • However, we often have out-of-pocket expenses, dues, and deductibles that we are responsible for that may require us to dip into savings, which many Americans simply don’t have, especially in the current economy.
  • This is where having supplemental health insurance comes in handy. This insurance does not replace your primary medical insurance, but, as the name suggests, is “supplemental” or “additional” insurance.
  • Supplemental health insurance provides a cash payment when you or a dependent in your plan experience certain medical accidents.
  • Cash payments can be used as you wish, but are typically used by people to cover out-of-pocket expenses resulting from these medical incidents.
  • Supplemental health insurance products are increasingly being offered as a benefit by our employers, who are choosing a plan that complements well with our main medical insurance. If you choose to purchase supplemental health insurance through your employer, the premiums are deducted from your paycheck, as with other workplace benefits.

Q: Is complementary health insurance on the rise?

  • Yes. Supplemental health insurance products are among the fastest growing employee benefits as our health and that of our families has become a focal point for many of us due to the COVID-19 pandemic.
  • Sales of supplemental health care services at Securian Life Insurance Company are up 56% so far this year.

Q: What are the different types of policies?

  • There are three main types of supplemental health insurance, including accident, critical illness, and hospital indemnity insurance.
  • Accident insurance pays you a benefit if you or a covered dependent are injured as a result of an accident; for example, your child breaks his arm playing soccer or you break your leg falling off a ladder.
  • Critical illness insurance pays a benefit if you or a dependent are diagnosed with a serious illness, such as cancer, stroke or heart attack. Some insurers are also expanding the list of covered conditions to include COVID-19, mental health diagnostics and counseling, PTSD, and allowing a dependent parent to be added to the plan.
  • Hospital liability insurance pays you cash compensation if you or a dependent are hospitalized.
  • Like all insurance, these policies are a risk management tool. If you’re trying to determine whether you should purchase supplemental health insurance, consider your lifestyle and family medical history. Products and availability may vary and limitations and exclusions may apply depending on the type of insurance product you are considering.
  • Securian has more on the different types of insurance products and what they do and don’t cover on their website.

Q: How do we know if we have access to supplemental workplace health insurance?

  • Check with your human resources department to see if these policies are an option for you.
  • Your employer may offer these policies as part of your overall benefits package.
  • There are a few key benefits to buying supplemental health insurance through your employer: Guaranteed coverage options are available, and premiums are typically more affordable than policies you buy outside of your employer’s benefits. Your employer may also have access to additional tools to help you understand the benefits and what might work best for you.
  • More and more employers feel a responsibility to take care of their employees and provide a more substantial benefits package to hire and retain their employees.

Q: What else do people need to know about these policies?

  • In the new year, new benefits may be available. Or when your life changes – you get married, have a child, etc. – you may have the opportunity to reconsider the benefits offered by your employer.
  • If supplemental health insurance is new to you, make sure you understand your policy and its benefits.
  • Many policies contain a wellness benefit for each covered person that provides a $50 to $100 benefit for an annual physical or diagnostic test for things like mammograms and PSA tests. Since these services are often provided free of charge as part of your main medical insurance, this is a great benefit that encourages proactive care and can be claimed annually.
  • Finally, every insurer has various options for making a claim, so it helps to understand the details of what information you need to collect and how and where you can send it in the event of a suitable medical event.

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