Supplemental Health Insurance and ObamaCare
Supplemental health insurance, or Supplementary insurance, is meant to supplement your plan and is not ObamaCare compliant on it’s own. Supplementary insurance is sold by private companies and can help pay some of the health care costs that your plan doesn’t cover, like copayments, coinsurance, and deductibles.
There are a number of supplemental health insurance options for private individual and family health insurance, and for public health options like Medicare. Whether or not a supplement health plan is right for you depends on your medical needs, what plan you have already, and what plans are available to you.
• As a general rule of thumb Americans under 65 should simply obtain a major medical plan during open enrollment and won’t need supplemental insurance.
• Other options include dental and vision only plans, which aren’t covered on most major medical plans. Typically, families benefit more from dental and vision plans then single policy holders.
• Not all plans cover you outside of your region. For instance an HMO may only cover certain regional providers in-network. If you plan to travel and your plan doesn’t cover you, supplemental travelers insurance is an option.
• In the private individual and families markets supplemental insurance is not sold on the health insurance marketplace and doesn’t need to follow all the new rules and regulations the Affordable Care Act sets forth. For Medicare supplemental insurance is more regulated, but also follows a unique rule set and is sold by private companies only.
Medigap, Medicare Part D, and Medicare Advantage Supplemental Plans
Supplemental plans are common and pretty popular in the Medicare market. In fact we strongly suggest supplemental coverage from you initial enrollment period on, as missing enrollment periods can mean higher costs for life. Supplement plans include:
• “Medigap” which “covers the gap” between what Medicare pays and what your actual medical expenses may be. Medigap supplements traditional Medicare Parts A and B.
• Medicare Advantage, while not technically a type of supplemental health insurance, comprises a variety of plans that Medicare offers as a coverage alternatives to the traditional program. Medicare Advantage can be described as supplementing Medicare. Please note you cannot have both Medigap insurance and Medicare Advantage.
• Medicare Part D Prescription Drug Coverage which fills the “gap” in prescription drug costs. Medicare Part D can be paired with Medigap and is usually included with Medicare Advantage.
If you have Medicare Part A (Hospital Insurance) or Medicare Part C (Medicare Advantage) which includes Part A, you’re considered covered and won’t owe the fee for not having health insurance in 2014.
How to Get a Supplemental Insurance
Supplemental Plans, both in the individual and family and Medicare markets, are purchased through private companies and aren’t part of ObamaCare’s health insurance marketplace.
For Medicare you can use Medicare.Gov to shop for plans, for non-Medicare you’ll contact a broker or provider directly.
Supplemental Medicare Plans
If you want to sign up for a supplemental Medicare plan you’ll need traditional Medicare first. You can learn more on our Medicare enrollment page or go to the Medicare.gov sign up page for more information. If you are looking for a Medicare Advantage, Part D, or Medigap plan those are sold by private companies and can be shopped for online or through a broker.
Individual and Family Supplemental Health Plans
In most cases you’ll want to make sure you have your basic major medical coverage that counts as minimum essential coverage before shopping supplemental plans. In the individual and family market supplemental plans tend to make less sense as it’s usually wiser to simply pick the right plan in the first place.
The above being said, supplemental health plans may be the right fit for some individuals and families who already have subsidized marketplace plans or plans through work that don’t cover all their needs. Common needs not covered by major medical include things like dental, vision, and traveling. Supplemental health insurance can also be a smart option for those who are unable to get health insurance outside of annual open enrollment periods.
In the workplace supplemental insurance can help you transition between jobs.
Are Supplemental Health Plans Minimum Essential Coverage?
Supplemental plans are not minimum essential coverage and will not help you avoid the fee for having health insurance on their own. They are simply meant to sit on-top of compliant plans and provide additional coverage. Let us use Medicare for example, Part A and B are minimum essential coverage, but if you also choose to get Part D drug coverage on top of this to “cover the gap” in regards to drug costs that Medicare doesn’t cover or only covers in part. For some a supplemental plan can actually reduce overall medical costs!
Although a temporary rule may be passed down the line that exempts those who are confused about this in 2014, the law very clearly states that supplemental health plans are not ObamaCare compliant on their own (please do not expect a rule to be passed). This is true for both private and public supplemental health plans.
Beware brokers who try to pass off supplemental plans as ObamaCare compliant plans. As a rule of thumb if a plan starts right away, is suspiciously cheap and is being sold outside of the marketplace you may be being pitched a supplemental, fixed benefit, short-term or other type of non-ObamaCare compliant plan and will still owe the per month fee for not having health insurance.
Supplemental Insurance Supplements Your Compliant Plan
For some off us a supplemental plan will make a lot of sense, especially for those on Medicare. Let’s say you need better drug coverage then Original Medicare offers, you may want to pick up supplemental insurance that covers that. Supplemental tends to make the most sense for Medicare enrollees as Medicare is a one-size-fits-all health option with a ton of highly regulated supplemental options.
On the other hand it will usually make more sense to simply get the right private plan in the first place for individuals and families under 65. Of course this isn’t always an option, and thus it makes sense for some to consider supplemental plans.
If your insurance doesn’t give you the benefits you need you can consider adding a supplemental option, just make sure your base plan is ACA compliant!
Why Get Supplemental Health Insurance?
Supplemental health insurance is a good choice for seniors who need better coverage than Original Medicare offers or the odd individual or family who has chosen a plan but finds buying additional benefits is cheaper than changing their plan, or other financially sound reasons like having a family that can benefit from vision and dental coverage.
Does Supplement Health Insurance Cost More?
Supplement plans will almost always come at a low price tag, just remember this is an additional cost to your base health insurance. With Medicare you are entitled to parts A and B, while other parts will supplement your base plan at additional costs. The savings you get from a supplemental plan will always come from savings on medical expenses and not premiums
Can I get Cost Assistance on Supplementary Health Plans?
In general you cannot get cost assistance on supplemental plans. You can only get ObamaCare’s cost assistance by enrolling in a qualifying plan on the health insurance marketplace during open enrollment. Supplementary plans are not available on the marketplace and aren’t qualifying health plans. That being said some Medicare rates are based on income, as are Medicaid rates (which sometimes include supplemental coverage for vision and dental).
Should I Get Supplemental Health Insurance
Whether or not Supplemental health insurance makes sense for you depends upon your intentions and specific situation. If you have read and understand the information on this page you should have a good idea as to whether Supplemental coverage makes sense for you.
Understanding Supplemental Health Insurance