What is Supplemental Insurance?
Supplemental insurance operates as additional insurance and when combined with other health insurance, helps in paying for health care services and other expenses that major medical insurance does not cover. It is not replacement coverage. It's merely an add on to the major medical coverage and is one of many kinds of "gap" insurance. Usually seen in conjunction with Medicare coverage and called Medigap coverage, it assists with paying the "gaps" that aren't paid by Medicare such as deductibles and copayments.
Supplemental coverage is not only available to those covered by Medicare but is also available to the general public. It can supplement major medical or life coverage and as opposed to medical benefits, supplemental benefits are paid directly to the insured. These payments can then be used for purposes of paying non-medical cost such as insured's mortgage, utilities or other bills. The insured uses these benefits at his or her discretion. Supplemental coverage is also available when disability, accident or if major illnesses occur.
As benefits through major health plans have decreased, supplemental coverage has increased. Demand is expected to further increase as a result of the Affordable Care Act.
A waiting period can apply before eligibility for supplemental benefits, especially after hospitalization and surgery. Vision and dental care may not be be covered, depending on the insurer.
Supplemental coverage is also available when disability, accident or major illnesses occur, as well as maternity coverage, filling in for lack of paid maternity leave and gap coverage. Again, benefits are paid directly to the insured. Even infertility coverage is available on a supplementary basis. Its often the only option available for families wishing to conceive as most health insurers won't cover infertility treatment.
Because we usually think of supplemental insurance in the context of Medicare, we might ignore the extensive supplemental coverage and benefits that are available to us.