Supplement Vs. Replacement Health Insurance

Supplemental insurance can help you save money on medical costs.

Supplemental insurance can help you save money on medical costs.

Health insurance is a hot political topic, but it's also a highly personal matter that can affect your financial and physical well-being. If you're weighing your health insurance options, you're probably overwhelmed by jargon, particularly if you're considering a secondary plan. While replacement health insurance is any policy you use to replace your current one, supplemental insurance adds an extra layer of protection for items your current plan doesn't cover.

Understanding the Difference

If you're unhappy with your current healthcare plan, a replacement policy might be the best option. You'll purchase a new plan and then cancel your old one. However, if your current plan is okay, supplemental insurance can provide you with additional coverage. It acts as an additional "umbrella" to protect you from unexpected health-related costs not covered by your current plan.

Knowing What to Buy

Now that the Affordable Care Act has taken effect, health insurance exchanges should be your first stop if you're looking for replacement coverage. Depending upon your income, you might even be able to get government assistance to purchase a policy. If you're looking for supplemental insurance, though, you won't find these policies on health exchanges. Instead, you'll need to carefully review policy options, read reviews of various policies and be sure to read the fine print so you know what is and is not covered.

Supplemental Health Insurance Options

Not all supplemental policies cover the same things. Dental and vision insurance are considered supplemental plans, but you can also purchase critical illness or accident coverage. Critical illness coverage helps cover the costs of serious illnesses such as cancer and can step in and pay the costs your normal policy doesn't cover. Accident insurance, by contrast, will cover the costs of an accident, such as a car accident.

Weighing Costs and Benefits

If you're considering a replacement plan, you'll need to compare your current plan with the one you're considering. But if you're considering supplemental coverage, you'll have to consider whether the additional costs of the plan are worth the additional protection. Supplemental coverage plans are ideal for people with high-deductible policies, but if you already have good insurance with a low deductible, supplemental insurance might be little more than an unnecessary monthly expense.

About the Author

Van Thompson is an attorney and writer. A former martial arts instructor, he holds bachelor's degrees in music and computer science from Westchester University, and a juris doctor from Georgia State University. He is the recipient of numerous writing awards, including a 2009 CALI Legal Writing Award.

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