What Is Supplemental Health Insurance? (2024)

Health insurance covers the cost of preventative care, surgeries, doctor appointments, prescriptions, urgent care and much more. While many health insurance plans offer robust coverage, health insurance won’t cover all potential costs of getting sick.

Supplemental health insurance can fill some gaps and “supplement” existing health insurance plans. Supplemental policies don’t replace health insurance. They may help pay for health care costs not covered by a plan or provide additional coverage for specific needs like dental care, vision or long-term care.

How Does Supplemental Health Insurance Work?

Supplemental health insurance fills gaps in a traditional health insurance plan by providing coverage for certain expenses for which you’re responsible. Supplemental plans don’t typically cover medical treatments, such as surgeries or medications.

A supplemental plan may instead help pay health insurance deductibles or copayments, or pay for specific care, such as cancer or critical illness. Supplemental health insurance plans work differently than health insurance plans, but the specifics depend on the plan.

Supplemental health plans pay for expenses that health insurance doesn’t cover, such as dental, vision, disability and long-term care insurance.

A supplemental policy like critical illness insurance can pay you a lump sum payout if you’re diagnosed with certain medical conditions. This money can be used for any purpose, including medical bills, transportation, childcare, food or housing.

How Much Does Supplemental Health Insurance Cost?

The cost of supplemental health insurance varies by type of policy, such as:

• The average cost of dental insurance is $47 a month for comprehensive coverage, while a preventive plan costs $26 monthly on average, based on Forbes Advisor’s analysis of dental insurance costs.
• The average cost of vision insurance is $16 a month, based on our analysis of 12 vision insurance policies. Monthly costs ranged from $5 to $30 a month.
• The average cost of critical illness insurance is $2.47 monthly per $5,000 worth of coverage for a 40-year-old, according to insurance company Protective. Critical illness coverage costs more for older people. For instance, the average critical illness insurance costs $1.64 monthly per $5,000 worth of coverage for a 30-year-old and $3.88 monthly per $5,000 worth of coverage for a 50-year-old.
• Long-term disability insurance costs about 1% to 3% of your annual salary, according to Life Happens, a nonprofit dedicated to disability insurance education. That means if you’re making $60,000 a year, a long-term disability insurance policy would cost between $50 and $150 monthly.
• The average cost of long-term care insurance is $70 a month for $165,000 in coverage for a 55-year-old man and $125 monthly for a 55-year-old woman. That same coverage amount for a married couple with a joint long-term care insurance policy costs $173 on average, according to the American Association for Long-Term Care Insurance.

Supplemental health insurance plans are typically less expensive than regular health insurance plans, but the cost of supplemental health insurance depends on a variety of factors, including:

• Plan type
• Your location and age
• Insurance company
• Benefits and deductibles within the policy

The cost also depends on how you purchase the plan. For example, if you get disability insurance through your employer, the cost is likely subsidized. If you buy a private disability insurance plan, you pay 100% of the premium out-of-pocket.

When shopping for supplemental health insurance, it’s a good idea to get quotes from a few different companies and compare them.

How to Get Supplemental Health Insurance

You can buy supplemental health insurance directly from an insurance company. Your employer may also offer supplemental coverage as part of its benefits package.

Check with Your Employer

The first step in looking for supplemental health insurance is to check with your employer. Employers often provide dental insurance, vision insurance, disability insurance, accident insurance and other types of supplemental benefits.

You likely have to wait for your employer’s open enrollment period to sign up, unless you are a new employee.

Contact Insurance Companies Directly

You can check with insurance companies that offer the type of supplemental health insurance you want. For example:

• For dental insurance, the best dental insurance companies in Forbes Advisor’s analysis are Anthem, Guardian Direct, Ameritas, Humana and Spirit Dental.
• If vision insurance is what you need, our analysis of the best vision insurance companies found good options from Anthem, UnitedHealthcare, EyeMed and VSP.

Types of Supplemental Health Insurance

There are multiple types of supplemental health insurance that can provide coverage in different situations. You can purchase supplemental plans to complement your group health insurance or private health insurance policy. The cost and benefits vary depending on the plan and the provider.

Here are some of the most common supplemental health insurance plans available.

Accident Insurance

If you have an accident that is covered by an accident insurance policy, it can pay for the expenses that your regular health plan policy excludes. Your injury must meet the qualifications based on the accident plan details. Broken bones, burns, concussions and paralysis are just a few examples of covered conditions.

Many accident insurance policies, including , provide a payout in the event of an accidental death. If you pass away and your death is caused by an accident covered by the policy, your beneficiary will receive a lump sum payout, similar to a life insurance death benefit.

Cancer Insurance

If you are diagnosed with cancer, a supplemental cancer insurance policy provides money that you can use for any need. Cancer insurance benefits can be used for:

• Copays
• Deductibles
• Transportation to and from chemotherapy appointments
• Groceries
• Rent or mortgage payments
• Cancer treatments that aren’t covered by your health insurance
• Anything else you decide to spend money on

Critical Illness Insurance

If you are diagnosed with a specific critical illness (that will be listed in the policy), a supplemental critical illness insurance plan can pay for the out-of-pocket costs that your regular health insurance plan doesn’t cover. For example, if you have a kidney transplant, you could use critical illness insurance benefits to pay for your mortgage, groceries or child care while you recover.

Supplemental critical illness insurance generally covers many major illnesses, including:

• Cancer
• Coma
• Heart attack
• Loss of hearing, vision or speech
• Organ transplant
• Paralysis
• Renal failure
• Stroke

Dental and Vision Insurance

Most standard health insurance plans don’t include dental or vision benefits. If you want coverage for visits to the dentist or optometrist, consider a supplemental dental or vision insurance plan.

Of all the supplemental insurance policies available, dental and vision insurance are two of the most common. These policies cover preventative care (like two dental cleanings per year), as well as other expenses, such as contact lenses or prescription glasses.

Dental and vision insurance are usually relatively inexpensive and are sold by many health insurance companies.

Disability Insurance

Disability insurance provides income replacement if you become disabled and can’t work. You can purchase supplementary short-term disability insurance or long-term disability insurance. The difference between the two plans is how long the insurance company will provide benefits.

To use disability insurance benefits, you must prove your disability, which often requires verification from a doctor or a medical professional. Depending on the disability insurance plan, you may elect to receive compensation on a weekly or monthly basis. You will stop receiving income replacement when your benefits run out or when you can return to work.

Hospitalization Insurance

Although traditional health insurance plans cover hospitalization, your plan might not cover the entire stay. If your benefits run out, a supplemental hospital insurance plan can provide additional coverage for the portion that’s not covered by your primary policy.

The average cost of a three-day hospital stay is roughly $30,000, according to the federal government’s Healthcare.gov. That can take a big chunk out of your wallet. Hospital insurance, which is also called hospital indemnity insurance, can help pay for the cost of hospitalization.

Depending on the plan, hospital insurance may provide a fixed benefit for an entire hospital stay or it might provide a certain amount of coverage for each day you spend in the hospital.

Long-Term Care Insurance

Supplemental long-term care insurance helps cover the cost of long-term care services, which may be necessary if you are diagnosed with a chronic illness. Some of the expenses that a long-term care insurance policy will pay for include:

• Adult day cares
• Assisted living facilities
• Home health aides
• Nursing homes

To use long-term care insurance benefits, you’re typically required to meet certain criteria. For example, many policies will provide benefits when you can’t perform two out of the six activities of daily living (ADLs), such as bathing, eating or dressing.

How Does Supplemental Health Insurance Fill in the Gaps of Health Insurance?

The purpose of supplemental health insurance is to provide coverage for certain expenses that a traditional health plan excludes.

Even with the best health insurance plan, you’re still likely responsible for some treatment costs. Depending on the situation, a sudden medical diagnosis can cause financial strain. Supplemental health insurance plans provide a payout to ease the financial burden of these situations.

For instance, imagine that you get into a car accident and have a concussion. A typical health insurance policy would cover at least a portion of the cost of treatment, like an MRI and an overnight hospital stay. However, if the concussion was serious enough that you couldn’t work for a month, disability insurance would provide income replacement during that time.

Supplemental health insurance plans aren’t meant to replace your primary health insurance policy. Your health plan will always provide more robust coverage for medical care, but having secondary health insurance can provide additional funds for the expenses that you would normally have to pay for out of pocket.

Supplemental Health Insurance FAQ