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What Is Supplemental Health Insurance In Canada?

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A supplemental health insurance can help you cover the medical expenses that are not included in your current insurance plan. Read on to find out more about supplemental health insurance in Canada.

Supplemental health insurance

Source: Freepik

Are you looking to cover medical expenses your existing medical insurance does not? Wish to gain extra coverage and protection for you and your family? Well, this article has everything that you need to know. Keep reading and make yourself completely aware of “supplemental health insurance.”

What Is Supplemental Health Insurance in Simple Language?

It is a fact that most traditional health insurance plans cover only certain healthcare expenses. For example:

  • They may provide hospital stays but not for hospital visits or routine check-ups.
  • They can cover selected health conditions like cancer and heart ailments, but not cosmetic surgeries, such as liposuction, rhinoplasty, facelift, etc.
  • They may have a defined health plan network, and if you sustain any medical expense outside this specified area, they may not cover them.

It creates a need for the policyholder to meet such expenses not covered by their traditional health/medical insurance out of their pocket. It robs them of peace of mind, disturbs overall household budget and personal cash flow.

Thus, to save you from the hassles of meeting the unorthodox or uncovered medical expenses, a medical insurance product called “Supplemental health insurance” was introduced. It covers all the medical expenditures not covered by your traditional health insurance plan and provides you with extra coverage or protection.

A supplemental health insurance plan is a kind of superior to your traditional policy. It will pay you for all the medical expenses which your existing health insurance policy may not cover. 

Supllemental health insurance in Canada
Source: Freepik

How Does Supplemental Health Insurance Work?

The working of supplemental health insurance depends upon the type and nature of your purchased plan. Let us have a look at its works in the different scenarios:

1. Deductibles

It represents a mandatory expense to be paid by a policyholder to the insurance company. If the policyholder does not meet the “deductible,” the insurance agency will not be under any obligation to give you the medical reimbursement or compensation.

For example,

  • You have a medical insurance policy wherein you make a payment of a monthly premium of $1,100
  • The deductible associated with this plan is $6,000
  • You incurred a covered medical expense of $32,000

Before claiming any amount from the insurance agency, you will pay $6,000 to the insurance agency, or else they will not begin processing your claim.

Opting for a supplemental health insurance plan, you can cover your deductibles. You can get reimbursements or cashless claims for all the amounts paid towards deductibles from the insurance company.

2. Co-insurance or Co-pay

Most traditional health insurance plans have a condition of co-pay or co-insurance wherein you contribute a specific fixed percentage of the medical expenses incurred out of your pocket.

Example of how the supplemental health insurance works:

  • You have a medical insurance policy containing a clause of 10% co-pay
  • You incurred certain covered medical expenses to the tune of $50,000
  • Your deductibles are $8,000
  • In such a case, you will pay $4,200 ($50,000−$8000) x 10% out of your funds
  • Your traditional medical plan will not cover this amount of $4,200 

However, if you have a supplemental health insurance plan, it can also cover the amount you are paying under co-insurance.

Life insurance
Source: Freepik

3. Health Plan Network

Several medical insurance plans set specified boundaries, known as In-network or out-of-network.

When you incur medical expenses or see a doctor on your medical provider’s network list of the insurance company, you get the coverage for all such expenses under your traditional medical insurance plan and will get paid.

If you get treatment from an out-of-network doctor who does not have a valid contract with your insurance company, you cannot claim such expenses as your insurance company will not accept claims for such expenditures.

By having a supplemental health insurance plan, you can get reimbursement or cash benefit for all expenses incurred for out-of-network treatment.

4. Uncovered Health Conditions, Diseases, and Surgeries

Most traditional health insurance plans have a defined list of diseases they cover. A critical illness insurance policy offered by Specialty Life Insurance covers 24 different health conditions, such as Cancer, heart attack, aphasia, severe burns, stroke, etc.

If you or your family members sustain any disease or illness not covered in the list of 24 health conditions, you cannot get reimbursement or cash benefit from such an insurance agency.

A supplemental health insurance plan can provide a cover for all the health conditions, diseases, and surgeries not covered under your existing medical insurance policy.

Should You Buy a Supplemental Health Insurance Plan?

It entirely depends upon your choice, income level, risk appetite, and interest. You can cover the uncovered medical expenses by paying an additional premium over and above your existing medical plan. For that, a supplemental health insurance plan is worth buying.

However, ask yourself the following questions before buying any such insurance plan:

  • Is buying such a plan suitable for you? How frequently do you expect to claim money from your supplemental health insurance provider?
  • Will it be wiser to:
    • Save some money every month.
    • Put it in a separate high interest-paying account and
    • Use it to meet all your out of the pocket expenses?
  • Are you getting subsidies from your employer while paying premiums?
  • Will you be able to pay for high monthly premiums? Do you know this additional cost you need to pay besides your current policy premium?

The buying decision lies solely with you.

If you feel you can cover your uncovered medical expenses by paying a fixed periodical premium, buying such an insurance plan can boost your medical coverage.

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