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Supplementary health insurance can be helpful if you run out of money and your health care bills go up. That's the case even if you have health insurance, like Medicare.
A Harvard University study found that excessive health care costs accounted for 62% of all personal bankruptcies in the United States. Worse, 72% of Americans who went bankrupt as a result of high health costs had taken out health insurance as they fell into financial decline.
Therefore, if you're worried about not having enough money and coverage to cover the high costs of medical care, adding extra insurance to your health care payment arsenal may be a game-changer. you.
What is a complementary health insurance?
Supplementary insurance, also known as gap insurance, can fill the financial gaps of your health insurance coverage, allowing you to pay for full freight for expensive medical care.
Essentially, deficit insurance fills all financial gaps – think about health insurance deductibles, outstanding medical bills and underpayments in the event of illness or serious injury – and keeps you above all your health care expenses. health and out of financial risk.
In real terms, supplemental insurance can mean the difference of having thousands of dollars in health care costs or nothing at all if you have filled that gap in coverage.
Suppose your health plan costs $ 400 a month, but your deductible is $ 5,000 (which means you have to pay $ 5,000 of all your annual medical expenses before your health plan starts) .)
For example, if you have had a car accident and you paid $ 3,500 in medical care, a supplemental health insurance can cover that $ 3,500, which keeps your cash in good shape. .
All for an average additional insurance cost of between $ 100 and $ 300 per month for (Medigap coverage, for Medicare plan members), which is the total cost of supplemental health care coverage for anyone looking to fill a gap in coverage.
When should you consider complementary health insurance?
Beyond the desire to cover high medical costs, there are other good reasons to opt for a complementary health insurance.
What is your franchise? If the deductible costs of your health insurance plan exceed your savings of available cash, you may be a good candidate for extended health care insurance. Bankrate data show that only 40% of Americans are able to afford an emergency cost of $ 1,000. Complementary health insurance can help low-income Americans cope with a high health care bill.
You need money for incidental expenses. Suppose you are a single mother of three and your illness takes you away for a month or two. In this case, Gap health insurance can be very useful in covering childcare or day care costs, which can cost up to $ 1,500 per month, according to industry data.
If your employer does not support unemployed medical leave. If you are at work but you are suffering from an injury or illness and you can not return to work for a while, health insurance deficiency insurance you would avoid using credit cards or bank savings to cope with the excessive costs of health care. you have time to recover, to return to work without suffering serious financial problems for your household.
If you are an elderly person and you can not manage all your health insurance costs. Participants in Medicare plans know all too well that public health insurance does not cover everything. Thus, a Medigap policy – in whatever form – can close the loop on the excessive costs of health care for the elderly, at a few dollars per day.
Franchises, co-insurance and out-of-pocket expenses
Three essential factors of health care insurance – deductibles, co-insurance and out-of-pocket expenses – also contribute to the need for supplementary health insurance. Each of the three impactors is so important that it deserves an explanation as to why the gap insurance is badly needed for the health care consumer today.
franchises
The average cost of health care system franchises in the United States (ie, the amount you have to pay for medical expenses before the health plan coverage takes effect) increases and increases in a spectacular way.
According to the National Business Group on Health, the average deductible for health plans is $ 1,600 per employer, with family plans reaching $ 3,200.
Many plans in the Affordable Care Act have a deductible of up to $ 5,000 or more, although taxpayer-funded grants cover a portion of these costs.
With such high deductible costs, the need for good complementary health care insurance to cover high medical costs becomes understandable.
Coinsurance fees
Many large health insurance plans also have mandates that require users to pay co-insurance fees.
In a nutshell, co-insurance means the percentage of medical expenses you pay, relative to your health plan, once you have covered the deductible expenses of your plan.
For example, you consult your general practitioner and pay $ 200 for medical services, which is the amount allowed covered by your health plan. If you paid your deductible and your co-insurance rate is 20%, you still have to pay 40% of the $ 200 office visit.
Even worse, if you have not paid your deductible, you are responsible for the entire $ 200. In this case, the supplementary insurance can provide additional cover to cover the costs of the co-insurance of the health care plans.
Refundable expenses
The costs of health care supported are the amounts of expenses that you can expect to pay, as stated in your health plan's contract, with maximum limits.
For example, in 2019, the maximum expense for plans under the Affordable Care Act is $ 7,900 for an individual and $ 15,800 for family coverage. To be specific, this is the maximum amount you can pay and you can pay, but there is no guarantee that you will pay these maximum fees.
For example, if you stay relatively healthy and see your doctor once a year for a check-up, your chances of paying only about $ 100 (depending on your health plan) will be taken into account. charge.
But if you become seriously ill or suffer a serious injury, the chances of maximizing your personal expenses increase precipitously.
In this case, the total cost of deductibles, co-insurance and out-of-pocket expenses could be as high as $ 10,000 or more. In this case, paying the maximum expenses of the plan can easily break the household budget and waste a lot of time.
Supplementary health insurance can provide much-needed protection against the high costs of health insurance, especially if you have a history of frequent medical visits and high health costs.
How much does the complementary health insurance cost?
The payment of a complementary health insurance or health insurance (Medigap) will depend on your personal situation and the type of health insurance you own.
In addition, not all complementary health plans pay for the same things. For example, some deficiency insurance plans will directly support deductibles, co-insurance and direct medical expenses.
Others may choose to pay a lump sum for health insurance claims (you have to pay for the funds) or pay a cash benefit to a health clinic, a hospital or a doctor's office, and for prescriptions.
Although the costs of additional health care are different, they seem manageable given the benefits provided by these plans.
For example, Medigap Insurance, the most used complementary supplemental insurance plan, can be purchased at a price as low as $ 100 per month, although most monthly Medicare plans are close to $ 150 per month, and that costs increase as the consumer ages.
If you want to bridge the gap in health insurance premium costs related to Medicare or ACA, supplemental health insurance plans deserve further consideration.
For best results, talk to a health care insurance specialist before you sign up for a specific plan and see where your doctor is about accepting health insurance that fills gaps .
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