Supplemental insurance covers areas that the employer-provided or employee-purchased medical insurance plans do not. It is sometimes referred to as gap insurance. Supplements may include special areas such as major medial or dental, or may add coverage for family members not covered by the primary policy.
Individual Coverage
The UPMC, a non-profit global health system headquartered in Pittsburgh, Pennsylvania,
includes individual coverage as one option for supplemental insurance. When an employee is covered under group health insurance, an additional health insurance policy is sometimes purchased if the existing coverage is viewed as inadequate for the employee's needs. The AARP reports that "...tens of millions of people in this country are underinsured, and they probably don't realize it." The regulations governing individual insurance coverage vary by state, and company offerings differ accordingly.
Major Medical
The Annenberg School of Communication confirms that bankruptcies caused by medical expenses occur every minute in the US. Employee health insurance plans have limits on the amount of coverage for a year, and also over the life of the plan. Supplemental major medical insurance takes effect when the regular policy payments are exhausted or the caps are reached. Most of the major group insurance providers also offer major medical coverage. Some states, such as California, work with major insurance companies to provide special insurance policies for uncovered residents.
Hospital Indemnity Insurance
When health or injury prevents working, hospital indemnity insurance provides a daily cash allotment to the insured. Major medical pays for hospital, doctor and medical-related costs, while hospital indemnity supplies cash to cover bills when the insured is unable to work. Life insurance companies, such as Met Life, Colonial Life and Mutual of Omaha, typically sell policies.
Medigap Insurance
Medigap is the term used to describe supplemental private health insurance purchased to cover health care costs that are left uncovered under the U.S. Medicare Plan. In order to simplify the plan comparisons for senior citizens, the federal law requires policies to fit within 12 different Medigap policies, titled Medigap Plans A through L. Private insurance companies sell these supplemental gap policies.
Dental and Vision Insurance
Dental and vision insurance coverage is frequently offered by employers as a supplemental insurance group option. Organizations such as AARP arrange with private insurers to provide supplemental eye and dental policies at a reduced cost to each member based on its large membership base.
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