RALEIGH, N.C. — Millions of people across the country struggle to get access to health insurance due to out-of-pocket expenses during the pandemic and other circumstances.

Recent data from a 2022 credit consumer report revealed about $88 billion in past due medical debt.

Financial experts say having supplemental health insurance can help ease the burden of out-of-pocket expenses that major medical insurance won’t cover.

Darin Reeser with Securian financial explained how supplemental insurance works and how it can help.

Enrollment for employee benefits at work has ended and many of us will have new benefits available in 2023, including supplemental health insurance. More employers are opening supplemental health benefits to help soften the blow of out-of-pocket medical costs. 

Securian Financial's Darin Reeser explained what these benefits are and how they work.

Q: What is supplemental health insurance?

• An accident, a critical illness or an extended hospital stay are unexpected events that can turn our world upside down.
• Thankfully, when they happen, our major medical insurance—commonly referred to as health insurance—which most Americans receive through our employers, kicks in to help cover medical costs while we recover.
• However, we often have out-of-pocket expenses, co-pays, and deductibles that we are responsible for that may require us to tap into savings—which many Americans just do not have, especially in the current economy.
• That’s where having supplemental health insurance comes in handy. This insurance is not a replacement for major medical insurance, but instead, as the name implies, is “supplemental,” or “additional” insurance.
• Supplemental health insurance provides a cash payment when you or a dependent on your plan experience certain medical incidents.
• The cash payments can be used however you wish but are typically used by people to help cover out-of-pocket expenses resulting from these medical incidents.
• Supplemental health insurance products are increasingly being offered as benefits through our employers, which choose a plan that integrates well with our major medical insurance. If you choose to purchase supplemental health insurance through your employer, the premiums are deducted from your paycheck, like with other workplace benefits.

Q: Is supplemental health insurance on the rise?

• Yes. Supplemental health insurance products are among the fastest-growing employee benefits, as our own health and the health of our families has become an increased focal point for many of us because of the COVID-19 pandemic.
• Sales of the supplemental health benefits at Securian Life Insurance Company are up 56% so far this year.

Q: What are the different types of policies? 

• There are three main types of supplemental health insurance including accident, critical illness and hospital indemnity insurance. 
• Accident insurance pays you a benefit if you or a covered dependent experience injury from an accident; for example, your child breaks their arm playing soccer, or you break your leg falling off a ladder.
• Critical illness insurance pays a benefit if you or a dependent are diagnosed with a major illness, like cancer, stroke or a heart attack. Some insurers are also expanding the list of covered conditions to include COVID-19, mental health diagnostics and counseling, post-traumatic stress disorder, and allowing a dependent parent to be added to the plan.
• Hospital indemnity insurance pays you a cash benefit if you or a dependent are hospitalized.
• Like all insurance, these policies are a risk management tool. If you’re trying to determine if you should purchase supplemental health insurance, consider your lifestyle and family medical history. Products and availability may vary, and limitations and exclusions may be applicable depending on the type of insurance product you are considering.
• Securian has more about different types of insurance products and what they do and don’t cover on their website.

Q: How do we know if we have access to supplemental health insurance at work?

• Check with your human resources department to see if these policies are an option for you.
• Your employer may offer these policies as part of your overall benefits package. 
• There are a few key benefits of buying supplemental health insurance through your employer: Guaranteed coverage options are available, and the premiums are typically more affordable than policies you buy outside your employer’s benefits. Your employer might also have access to additional tools to help you understand the benefits and what might work best for you. 
• More employers are feeling a responsibility to take care of their employees and provide a more robust benefits package to recruit and retain their workers. 

Q: What else do people need to know about these policies? 

• In the new year, new benefits may be available to you. Or as your life changes—you get married, have a child, etc.—you may have an opportunity to reconsider the benefits offered through your employer.
• If supplemental health insurance is new to you, be sure you understand your policy and its benefits. 
• Many policies contain a wellness benefit for each covered person providing a benefit from $50 to $100 for an annual physical or diagnostic testing for things like mammograms and the PSA test. Since these services are often provided at no charge as a part of your major medical insurance, this is a great benefit encouraging proactive well care, and it can be claimed every year.
• Finally, every insurer has various options to submit a claim, so it’s helpful to understand the details about what information you’ll need to gather and how and where you can submit it should you experience a qualifying medical event.