Supplemental Health Insurance
Additional supplemental health insurance protection plan has increased in importance as employers move toward providing catastrophic insurance protection only under the range of consumer-driven wellness plans. The intention of consumer-driven wellness plans is to pay non-catastrophic costs outside of insurance protection.
In effect, the surge in individually purchased supplemental insurance protection indicates that the transition is not going smoothly.
Employers have not adequately funded Health Savings Accounts (HSA) and Health Reimbursement Arrangements (HRA) as policymakers had previously hoped. Many believe that employers will continue this long term trend of “getting out of the health care business”. Individual consumers usually do not have the financial resources to cope with the risks of everyday healthcare costs. An typical household has, on average, $200 to $500 out-of-pocket hospital bills yet budgets less than $100 per month for thee costs. Additional supplemental health insurance protection plan helps even the cash flow through a budgeted premium bill and provides protection for costs that are greater than expected.
Supplemental wellness insurance protection plan is also known as “defined benefit insurance” because the maximum specific advantages are presented in dollars for various types of covered healthcare costs. For example, a plan may provide $1,000 per day for hospitalization. In contrast, significant healthcare polices cover a non-specific “ordinary and necessary healthcare expenses” up to the plan limit; typically $1 million or more. The significant wellness protection may actually be stronger, but is vague and subject to misinterpretation by doctors and consumers. This vague definition of advantages is the underlying reason for the numerous controversies that supplemental health insurance protection plan companies face today. Additional insurance protection largely avoids this debate. This difference in defining advantages also tends to make supplemental insurance protection more predicable and stable in long term pricing.
The second significant distinction is that supplemental insurance protection advantages are compensated directly to the individual policyholder in addition to any other insurance protection advantages that are usually compensated to the doctor or hospital. Benefits payments do not need to be used only for healthcare costs but are commonly used to offset income lost due to illness or injury. Unlike significant insurance protection, supplemental plans do not use a subjugate claims; meaning that advantages are not reduced due to other protection.
The primary advantages of supplemental insurance protection are that it is: 1) easy to understand, 2) affordable, 3) stabile, and 4) advantages are compensated in cash to be used at the policyholder’s discretion.
The primary disadvantage is that it may leave consumers unprotected for larger catastrophic claims. The avoid this risk, combine supplemental insurance protection with another significant healthcare plan.
Supplemental wellness insurance protection plan guidelines are generally less expensive than regular supplemental health insurance protection plan. The lower cost is directly attributable to the lower benefit amounts that are offered as compared with traditional supplemental health insurance protection plan. For example, a traditional wellness protection might pay up to $1 million in total healthcare costs where a supplemental plan might cap advantages, for example, at $50,000. The actual dollar limit of advantages is listed in the plan.
In some cases, this is the only wellness insurance protection plan that an applicant can find or can afford; in these cases it is better to have some limited protection than having no wellness insurance protection plan at all.
Combining guidelines without co-ordination of benefits
Traditional significant insurance protection plan guidelines have a provision that allows the plan provider to reduce advantages for costs that are compensated by another supplemental health insurance protection plan policy. For example, if you break your arm in an auto accident, your regular wellness insurance protection plan usually does not pay because the auto insurance protection covers all of the healthcare costs.
Supplemental health insurance protection plan works in the opposite way. Using the same example, supplemental insurance protection would pay a cash benefit even though all of the hospital bills had already been compensated by the auto insurance protection provider. The cash might be used to pay deductibles on other guidelines, offset lost wages due to the disease or might simply be used as “Mad Money” just help lessen the suffering of the broken arm. It does not matter what other insurance protection is available nor how the benefit payment is used.
This provision makes it possible to overlap protection and essentially allows buyers to buy as much or as little insurance protection as they wish or can afford.
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