What Is Supplement Health Insurance and How Does It Work?
A supplemental health insurance policy is a policy that can be used to help supplement any gaps in coverage and out-of-pocked expenses that your existing private health insurance plan fails to cover. Think of it as a sort of dessert topping—sure, ice cream is great, but we all know it would be better with a little fudge on top.
Like all things, supplemental health insurance plans come in an array of flavors, and can range from dental insurance, vision insurance, critical illness insurance, and more—either way, the purpose of supplemental health insurance is the same: to cover you when your regular, private health insurance plan does not.
But for those in countries that offer universal health coverage, is there a purpose in offering supplemental health insurance?
The Role of Supplemental Health Insurance in Countries Offering Universal Healthcare
Supplemental health insurance can be used as a means to supplement an insured’s private health insurance policy, but for countries offering universal healthcare (aka “single payer healthcare”), is there such a thing as supplemental coverage?
In short, the answer is kind of.
Generally speaking, in countries offering universal coverage, at least some portion of the population has a secondary private insurance plan. In these cases, private health insurance helps individuals pay for treatments, prescriptions, and other forms of health care not covered under their universal health policy.1
For example, in countries like Canada, approximately two-thirds of the population holds a private health insurance plan to assist with prescription drug costs, vision, and dental care.2 In this situation, private health insurance acts as a form of a supplemental insurance policy, allowing the insured to receive coverage in areas where their existing universal health care insurance does not.
Additionally, in countries like Australia, which provide universal health care and private health care options to its citizens, private health insurance operates as a supplement to one’s existing universal health care policy.3 For example, in Australia, individuals are encouraged to enroll in private insurance, as private insurance covers the costs of gaps in universal health care coverage, which can include but is not limited to, vision care, dental costs, hospital accommodation, surgery fees, and more.4
The role of supplemental insurance in the United States is clear: it’s there to help individuals cover any additional costs not included in their existing health care insurance plan. However, what we know as supplemental health insurance exists in countries offering universal health care options, like Canada, Australia, and England, as private health insurance.
As we previously learned, individuals living in countries with universal health insurance often have an additional private insurance plan, which acts in a similar fashion to a supplemental insurance policy. As such, while the name differs, supplemental insurance does exist in countries with universal healthcare as private health insurance—and continues to be helpful for those looking to cover additional health costs not included in their plans—public or private.
The Balance, The Basics of a Supplemental Health Insurance Plan, 2019
The Commonwealth Fund, The Commonwealth Fund, Variations on a theme: A Look at Universal Health Coverage in Eight Countries, 2019
The Commonwealth Fund, The Canadian Health Care System, n.p.
The Commonwealth Fund, The Australian Health Care System, n.p.
Categories: Insurance, Supplemental Health Insurance