Does your health plan need a supplement?

Supplemental medical insurance is just what the name implies - extra coverage to augment your regular health insurance.

by Jim Biesterfelt

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Supplemental medical insurance is just what the name implies — extra coverage to augment your regular health insurance. It most often comes in the form of cash payments for each day of hospital confinement. While not a replacement for health insurance, it can be a smart buy depending on your situation and the supplement’s cost and features.

Cash in your pocket

Supplemental medical insurance paid off in a big way for Dr. Keith Poe a few years ago. The Midland, Texas, dentist and his wife had MedCASHSM, a plan sponsored by the American Dental Association, when the couple’s quadruplets were born. His wife was hospitalized for a month prior to the delivery, and the four infants also required hospitalization.

Under the plan, the newborns were automatically covered for 31 days, and the benefit was doubled for each day of intensive care. The net result: Dr. Poe received a check for $120,000 for the babies and an additional payment for his wife’s hospitalization.

“The amount was quite a surprise,” Dr. Poe recalled. “We used the money to finish paying off all the medical bills, as well as to help pay for the nurses we hired when the babies came home and were on monitors 24 hours a day.”

It’s hard to top quadruplets, but even smaller claims can result in welcome cash. Dr. James Moriarity in Binghamton, N.Y., tapped into MedCASH for a short hospital stay. He and his wife used the money to eat out while he recuperated.

“I write a check twice a year for a modest premium and figure that if my health doesn’t hold up, I’ll get the money back in spades,” Dr. Moriarity said.

Broad coverage

If you and your family could benefit from supplemental medical insurance, keep the following in mind as you shop for coverage:

Qualifying criteria. Inquire if you need a medical exam to qualify. You may not have to provide proof of insurability for basic coverage, but benefits could be subject to pre-existing condition limitations. Higher coverage levels may require medical underwriting.

Coverage features. In addition to covering inpatient hospital stays, find out if the policy pays a benefit for emergency room visits and certain outpatient care. Ask if there is an additional benefit for days in intensive care and a reduced benefit for mental health confinements. Also be aware that the duration of in-hospital benefits can vary by policy — typically a range of 300 to 500 days. Dollar amounts also vary. For example, it could be $100 to $500 per day for in-hospital stays. Shop for a plan that you can continue for many years — until perhaps age 80 or 90 — since your need for supplemental coverage could increase as you grow older.

Critical condition options. Consider a plan that includes a lump sum cash benefit if you are diagnosed with a critical condition such as a heart attack, stroke, loss of hearing, and so on. Look for coverage that includes a broad range of critical conditions rather than being limited to just one specified disease, such as cancer.

Payment methods. Shop for a policy that pays no matter what your other insurance pays, and sends the check directly to you rather than to the health-care provider. This way you can use the money as you choose — for hospital co-pays, travel expenses, home care, or even a recuperative vacation.

Cost. Finally, always compare premium costs with potential benefits. Supplemental medical insurance should be relatively inexpensive, but expect some variation among insurance carriers.

Even with excellent health insurance, the out-of-pocket expenses associated with just one major medical trauma could significantly impact your financial liquidity. To help alleviate these expenses, take a closer look at supplemental medical insurance.

Editor’s Note: The testimonials reproduced in this article were obtained in response to questions posed by Great-West Life concerning the value of insurance. The article does not constitute legal, financial, or medical advice. Please seek professional input as appropriate to your situation.

Jim Biesterfelt is vice president of Group Special Accounts at Great-West Life & Annuity Insurance Company, which insures the ADA Insurance Plans and is the sole provider of ADA-sponsored life and disability insurance to ADA members. For information about insurance costs, coverage, limitations, and terms for keeping coverage in force, call (866) 607-5330, email ada@gwl.com, or visit www.insurance.ada.org.

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