What Is Supplemental Insurance?
The gist
Supplemental insurance is a type of policy you can purchase, typically from insurance companies or other private brokerages, that fills certain gaps that might be present in your existing health insurance coverage.
Some of the most common types of supplemental insurance are life insurance, short- and long-term disability, dental and vision insurance, and accident or critical illness insurance.
Unlike regular health insurance, most supplemental insurance does not have an Open Enrollment Period (OEP) Typically, you can apply for supplemental coverage any time of year.
One notable exception is if you’re hoping to sign up for Medicare supplemental insurance (also called Medigap). If you’re worried that certain pre-existing conditions may prevent you from getting coverage, you can sign up during your Medigap OEP.
Your Medigap OEP is a period of time when you can sign up for Medicare Supplemental Insurance without being denied coverage for any reason (like if you have pre-existing conditions). The Medigap OEP starts the day you turn 65 — provided you are signed up for Medicare Part B — and lasts for 60 days.
In this article
What are the different types of Medigap, and what do they cover?
What is the easiest way to enroll in supplemental insurance?
You may have seen ads on TV for supplemental insurance coverage and asked yourself, “Is supplemental insurance worth it?” Well, the answer to that isn’t quite so simple. Many Americans have a health insurance plan that covers all of the essential benefits (like prescription drugs, hospital visits, regular office visits, and more.) But these plans typically don’t include coverage for life, vision, or dental insurance.
Fortunately, all are available as supplemental policies. So if you’re hoping to fill some gaps in your current coverage, keep reading for our essential guide to supplemental insurance.
What is supplemental insurance?
Supplemental insurance is additional insurance coverage that you can purchase to fill certain gaps in your existing policy. While all Affordable Care Act (ACA)-compliant plans must cover “essential benefits,” certain benefits like vision and dental are not mandatory. As a result, you may need to purchase an extra policy to help cover out-of-pocket expenses.
One group of Americans who benefit heavily from supplemental insurance are Medicare Part A (doctor’s visit coverage) and Part B (hospital visit coverage) recipients. This is because Medicare Part A and Part B (also known as Original Medicare) notoriously lack some of the essential benefits, like prescription drugs.
If you are Medicare Part A and Part B recipient, you may want to look into Medicare Supplemental Insurance, commonly known as Medigap. Medigap plans, as the name suggests, fill certain gaps in Medicare Part A and Part B coverage, offsetting coinsurance costs, deductibles, point-of-service copays, and more, depending on which policy you purchase (we’ll cover that in detail later in the article).
What does supplemental insurance cover?
Generally speaking, there are a few different kinds of supplemental insurance you can purchase. Usually, you purchase each policy separately — sometimes even from separate companies — although some insurance brokers will offer bundles or packages.
The most common kinds of supplemental insurance include:
Life insurance: Provides a payout to your family (or other beneficiaries) upon your death. This payment is typically used to help offset end-of-life and funeral costs. Term life insurance only pays out if you die during the period of time you’re covered (often 10, 20, or 30 years), while permanent life insurance is much more expensive but will pay out regardless of when you die.
Short-term disability: Pays a portion of your income if you are sick or injured and can’t work for six months or less
Long-term disability: Pays a portion of your income if you are sick or injured and can’t work for six months or more
Dental insurance: Helps offset the costs of dental work, regular dentist visits, orthodontics, and certain oral surgeries and procedures
Vision insurance: Helps offset a portion of the costs of regular eye doctor visits, eye surgery, and vision correction (like glasses or contacts)
Accident insurance: Provides additional coverage in case of an accident or debilitating injury
Critical illness insurance: Pays a lump sum for treatment for critical illnesses like cancer or major medical treatment (like organ transplants, strokes, and more)
Is supplemental insurance worth it?
Now you know what supplemental insurance is. But do you actually need it?
If you’re young, have a steady income, and don’t have major medical issues in your family, you might be content simply adding vision and/or dental to your coverage. We would absolutely recommend that. Even if you have 20/20 vision and perfect teeth today, an accident, sudden disease, or other unpredictable event could end up costing you thousands out of pocket. Typically, vision and dental supplemental insurance only cost a few dollars a month, so to answer part of the question, yes, this supplemental insurance is usually worth it.
As far as some of the other supplemental insurances we described above, those are all recommended on a case-by-case basis. If strokes or cancer run in your family, you might want to consider getting a critical illness plan. Or if you predict an upcoming need for leave (for instance, if you are a non-birthing parent), you may want to start contributing to a short-term disability plan.
Can I get supplemental insurance any time?
Typically, yes, you can get supplemental insurance at any time. For all of the types of supplemental insurance we listed above, you can enroll at any point in the year. This is because there is no Open Enrollment Period for most types of supplemental insurance.
As for when coverage will begin, that depends on the carrier and the type of insurance you purchased.
What is Medigap, and when can I get it?
As mentioned above, Medigap is another name for Medicare Supplemental Insurance. It’s available to people over the age of 65 who are already enrolled in Medicare Part A and Medicare Part B. Medigap helps fill certain gaps in Original Medicare’s coverage (hence the name).
Medigap plans are lettered A-N (although some plans are not available to new Medicare/Medigap enrollees), and each lettered offering helps offset a different type of cost (we’ll cover this more in the next section).
You can sign up for Medigap at any time, but if you have pre-existing conditions, you may want to enroll during your Medigap OEP. That’s because during your Medigap OEP, you receive guaranteed issue rights, which means the carrier can’t deny you coverage (like, for instance, if you have a pre-existing condition). The Medigap OEP starts the day you turn 65 and are enrolled in Medicare Part A and Medicare Part B and runs for 60 days — so don’t wait!
What are the different types of Medigap and what do they cover?
As mentioned above, Medigap plans are lettered A-N, although a few are not offered to new enrollees anymore.
Here, letter-by-letter, is a quick explanation of what each Medigap plan covers:
Medigap Plan A: One of the more affordable offerings that includes only the basics. Medigap Plan A helps offset costs like:
Medicare Part A coinsurance
Medicare Part A hospital costs (up to an additional one year after benefits are used up)
Part A hospice care copays or coinsurance
Part B copay or coinsurance
Blood transfusion (up to the first three pints)
Medigap Plan B: Covers all of the situations described above for Plan A and adds one new benefit. It helps offset the costs related to your:
Part A deducible
Medigap Plan C: Unfortunately, new Medigap enrollees can no longer sign up for Medigap Plan C. But Medigap Plan D is almost identical!
Medigap Plan D: Helps offset costs in all of the situations covered by both Medigap Plan A and Plan B but adds a few additional benefits:
Residential nursing care facility coinsurance
Medically necessary emergency care when traveling outside the U.S.
Medigap Plan F: As of Jan. 1, 2020, new enrollees can no longer sign up for Medigap Plan F. But plan G offers similar coverage!
Medigap Plan G: Covers all of the situations described in Plan A, B, and D, and adds one new benefit:
Plan B excess charges might arise if a provider is permitted to charge more than Medicare’s approved amounts.
Medigap Plan K: A lower-premium option that pays only a portion of your costs. Medigap Plan K’s benefit offerings are:
Part A coinsurance (and hospital costs) up to one year after Medicare benefits run out.
50% of Part A deductible
50% of Part A hospice care coinsurance or copay
50% of Part B coinsurance or copay
50% of residential nursing facility care coinsurance
50% of blood transfusions (up to the first three pints)
Out-of-pocket limit for 2024: $7,060
Medigap Plan L: Another lower-premium option that only pays a portion of your costs. Medigap Plan L’s benefit offerings are:
Part A coinsurance (and hospital costs) up to 365 days after Medicare benefits run out.
75% of Part A deductible
75% of Part A hospice care coinsurance or copay
75% of Part B coinsurance or copay
75% of residential nursing facility care coinsurance
75% of blood transfusions (up to the first three pints)
Out-of-pocket limit for 2024: $3,530
Medigap Plan M: Nearly identical to Medigap Plan D, except it only covers 50 percent of the Medicare Part A deductible.
Medigap Plan N: A more cost-effective option with higher copays at the point of service in exchange for lower monthly premiums. These copays are:
Up to $20 for office visits.
Up to $50 for emergency room visits.
What is the easiest way to enroll in supplemental insurance?
So there you have it: everything you need to know about supplemental insurance and Medigap.
Stride takes the guesswork out of finding supplemental insurance with dental, vision, and life insurance policies tailored for independent workers. We empower you to make the right choices by showing you every plan available in your area — just enter your ZIP code to get started.
