By Lee Sherman
If you have health insurance through your employer, you probably think you’re covered. But have you really thought about what will happen to your savings if you are hospitalized for six months, suffer the death of a spouse, or come down with a virus such as Covid-19? Insurance varies according to the plan. If you haven’t checked lately, it’s probably a good time to go over yours. Don’t wait for one of life’s inevitable emergencies.
Supplemental means additional. Supplemental insurance providers (like Aflac) are there to paper over any holes in your coverage, offering a remarkable number of options to cover just about any contingency. Your primary healthcare is affordable, offers low deductibles, and because it is included in your overall compensation package you probably don’t even realize you are paying for it. What it probably isn’t is comprehensive.
Supplemental insurance can be costly (especially since paying for it comes directly out of your pocket) but nowhere near what you’ll end up paying in the case of a critical illness, a death or a long-term disability which can leave you bankrupt (most employee plans don’t cover these emergencies or if they do you’ll quickly exhaust your deductible). Surprisingly, even something as simple as ongoing dental or optical isn’t usually a part of your employer’s plan though it may be available to you for an additional charge (the Affordable Care Act requires individual and small group plans to provide coverage for pediatric dental and vision but this requirement can be met by including the coverage within a medical plan or offering it as a separate plan). And, if you shop around, you may even be able to find a dental or vision plan that is less expensive than the one offered to you by your provider.
The need to seek supplemental insurance can be as simple as wanting to see an out-of-network specialist or as complicated as needing to account for a lifelong disability or chronic condition.
If you’re retired or considering retirement, you should take a look at the supplemental Medicare coverage, Medigap. Medigap is provided by private insurers (such as Blue Cross Blue Shield, Cigna, Humana, and United Healthcare) to people already enrolled in Medicare. Medigap pays for some or all of the additional out-of-pocket costs that Medicare doesn’t. Supplementing Medicare will cost as little as just over $100 a month to closer to $400 depending on your needs.
Rising premiums, higher deductibles and a general reduction in the quality of coverage has driven many to seek supplemental insurance. Some of these plans will pay for out-of-pocket medical expenses such as deductibles, co-pays, and co-insurance. They may even provide lump sum cash payments that can cover lost wages, food, or medication due to a medical emergency. Whether or not supplemental insurance adds up for you will depend a lot on your job, age, health, and retirement status.
Lee Sherman is a contributing writer to MyPerfectFinancialAdvisor, the premier matchmaker between investors and advisors. Lee is an experienced journalist and editor with over 30 years of expertise with a significant history of writing in the personal finance and technology arenas.
