Skip to content
Home » Medical Gap and Supplemental Insurance: What it is and why you may need it

Medical Gap and Supplemental Insurance: What it is and why you may need it

What is supplemental insurance?

Supplemental insurance is additional health insurance that an employee may purchase, or employer can provide, that help reduces out-of-pocket costs that the primary medical insurance plan does not cover. However, supplemental or gap insurance is not a stand-alone product. Instead, it works in tandem with your ACA-compliant plan.

Why do you need it?

Having major medical insurance is not as simple as paying your premium and then having an all-access pass to healthcare. In reality, you will be responsible for premium, coinsurance, hospital and family copayments and all non-covered expenses as written in your policy.

A 2014 study by The Commonwealth Fund found that Americans pay more out of pocket for healthcare expenses today than they did 10 years ago. According to the study:

  • More than 1 in 5 adults age 19 to 64 who were insured all year spent 5 percent or more of their income on out-of-pocket costs, not including premiums; 13 percent spent 10 percent or more
  • 3 in 5 low-income adults and half of those with moderate incomes said their deductibles were difficult to afford
  • 2 in 5 adults with private insurance who had high-deductible health plans said they delayed needed care because of their deductible

Is it right for you?

If you want your bronze plan to feel more like a gold plan, but at a lower price—supplemental or gap insurance can be a great addition to your current benefits package.

Other types of “supplemental” insurance

While this article has been focused on medical supplemental insurance there are a variety of other supplemental insurance plans, like :

  • Dental Insurance
  • Critical Illness Insurance
  • Supplemental Travel Insurance
  • Long term care Insurance
  • Short term care Insurance
  • Accident Health Insurance
  • Medicare or Medicaid supplement plans and more

Something to note is that all supplemental plans, medical or not, are optional. It is up to you to decide if the premiums are worth the potential out-of-pocket savings you will get with a medical supplemental plan.

The average cost of supplemental insurance is about $1 a day and will vary from employer to employer. Depending on the type of supplemental insurance, the price can also vary with age.

If you’re interested in supplemental insurance or want to know more about it, call our Life and Benefits Consultant.

Furthermore, William H. Van Hooser, Jr. can be reached directly at 334-387-4314 or emailed at [email protected] for all your life and health questions!