Introduction
So imagine you’re self-employed and it’s your first time getting health insurance on your own. You’ve normally gotten it through your employer but now you’re no longer employed with them and you’re trying to figure it on your own. So you go to your health care exchange and you’re looking at what your options are and you see some plans that have really really high monthly premiums but really low deductibles and out-of-pockets and then the inverse where you have very low monthly premiums and really really high out of pockets and deductibles.
And you start to think well I’m self-employed I just started my own business or just started working for myself my cash flow is kind of low I don’t really want to pay 750 out of pocket every single month as a premium to my insurance that’s just not really doable. So maybe I should look at some of these lower monthly premium options that have a higher out of pocket and a higher deductible and you see some options that look good. Maybe there’s a plan that comes up that’s a 200 monthly premium and then a five thousand dollar deductible which is still pretty high but you’re only paying 200 a month which is great for your cash flow situation.
And then you start to think well I’m a really active individual and I like to play sports what if I get injured and then my injury is really expensive my medical bills are huge I’m gonna have to pay five thousand dollars before my health insurance picks up anything. But like I said you’re new to being self-employed so you don’t really have the cash flow available for that either to have an unexpected 5K medical bill that can really end up putting you in the hole.
So what are you supposed to do? Well the situation I just described is exactly why I decided to get supplemental health insurance. For those of you guys who have seen my previous article on this I’ve talked a little bit about the different types of health insurance you can get as somebody who is self-employed how you can combine them and all that stuff but I wanted to talk a little bit more specifically about why I got supplemental health insurance and how that factors into my personal health care situation.
Health Insurance Terms
But before I move any further into this article I want to talk a little bit about the different terms that I’m going to be using like deductible and co-insurance and out-of-pocket expenses.
So the deductible is the amount that you have to pay before your health insurance plan starts really helping you with any of your medical bills.
Now coinsurance is the amount that your health insurance plan has agreed to split with you after you’ve met your deductible. So let’s say you have a deductible of two thousand dollars you meet that deductible and then you have more medical expenses more doctor’s visits things like that that are still covered. Your insurance plan might have something like an 80 20 split where they will pay 80 of that medical expense and then you pay 20 percent and that split can look different depending on you know health insurance companies the plans that you have all those things.
The next is the out-of-pocket maximum and what that is is really after you’ve met your deductible and you’ve been paying co-insurance with your health insurance plan to cover your medical expenses once you get to a certain point you may reach something called your out-of-pocket maximum. That’s the maximum amount that you will have to pay before your health insurance plan will pay 100 of the covered services. So for example if I had a two thousand dollar deductible a met that deductible and I have an out of pocket of five thousand dollars I’ll be paying an 80 20 split with my health insurance and if I meet up to that five thousand dollars that I’ve paid total throughout the year of covered medical expenses then my insurance will then kick into a hundred percent and they’ll be covering a hundred percent of covered medical services for that year that you’ve been covered with your health insurance plan.
Why I Got Supplemental Health Insurance
So now that I’ve run through those terms I want to kind of go back to the reason why I got supplemental health insurance and what kind of role that plays for me as somebody who’s self-employed active and has a tendency for injuring themselves.
So in 2020 I injured my ACL and I had a health insurance plan at the time that I purchased myself through the exchange and I believe it was about a three thousand dollar deductible and sixty five hundred dollar out-of-pocket. So it was a high deductible plan which meant that I had lower monthly premiums and I chose that again because of my cash flow situation and I didn’t really want to spend 500 to 700 a month on health insurance it just seemed silly.
So unfortunately that year I tore my ACL and that’s a very expensive procedure to have that reconstructed. The surgery itself was billed for about forty thousand dollars. Physical therapy was close to a hundred dollars a visit. Then you have the leg brace that you wear for your ACL. You’ll have ongoing visits with your surgeon and your doctors follow-ups. It just gets really expensive over the course of that year.
So definitely goes without saying that I met my deductible and my out-of-pocket for that year but that still meant that I had around sixty five hundred dollars of medical expenses to pay for myself since that’s the out-of-pocket amount. So after that my health insurance picked up the rest of it but sixty five hundred dollars kind of on your own unexpectedly is still a lot especially if you’re self-employed and especially if you’re new to being self-employed.
Luckily the medical system and the surgery center that I’m a part of and got my surgery done at has a great payment plan system where I was able to break my payments down into chunks and be able to pay that off month by month so that was really fortunate. A lot of systems don’t have that so I felt very lucky that I was able to do that.
However it made me realize the importance of finding a solution for these instances especially given that I’m an active person and I love playing sports and getting injured is just part of playing sports right. So I don’t want to put myself in that position where I have to be in medical debt for some time but I do want to make sure I’m also choosing my health insurance plans wisely and not spending a ton of money each month for premium. So I wanted to find a solution that was in the middle which is why I found a supplemental accident policy.
What is a Supplemental Health Insurance Policy?
So what is a supplemental health insurance policy? Supplemental health insurance is exactly that. It’s a supplemental policy that helps individuals and families to pay for specific medical instances an existing individual health insurance plan might not cover because they haven’t met their deductible or they don’t have the cash reserves to pay their bills. This is basically having insurance for your insurance and since it’s a cash benefit the money can be used for anything such as medical bills your mortgage car payments even child care.
So if you’re somebody who has a high deductible health insurance plan and is worried about getting injured while you’re playing a sport or potentially getting cancer and just being able to afford that deductible or even that out of pocket maximum on your own getting something like a supplemental health insurance policy can really help you to bridge the gap and help to give you that cash benefit to cover the deductible to cover the out-of-pocket expenses that you might incur.
So using the example of my ACL surgery let’s say I injure my other knee which God forbid I hope doesn’t happen but let’s say that happens and I still have a high deductible health insurance plan right. But right now I also have a supplemental accident policy which I’m paying about twenty dollars a month for. The supplemental policy and they’re fairly inexpensive that’s just my personal case but this can vary you know person to person state to state but they’re usually very inexpensive and it makes your life a lot easier if you do want to kind of cover your bases.
But let’s just say I tear my other ACL I have to go get surgery and my out of pocket this year is still let’s say 6 500 and my deductible is three thousand dollars. So what this will do is I can then submit my bills my medical bills to my supplemental policy and they will either pay the benefit directly back to me and reimburse me if I’ve already paid for those bills or I can use that money to pay those bills or they might pay the provider directly. It depends on you know facility the state all those things.
So it just covers that bridge between your deductible your really high deductible and it just kind of creates a safety net. So insurance for your insurance. So if you’re somebody who is self-employed and wants to opt for a lower monthly premium and you have a high deductible in your plan and you have a risky either risky job or risky hobbies like something that’s going to make you more apt to get injured or even if you have cancer running in your family or things like that you just kind of want protection against having supplemental health insurance policies to cover that gap of what you could owe in your deductible your out-of-pocket. It is just such a breath of fresh air. It really makes me feel more at ease when I’m playing my sports when I’m active I don’t have to worry about it being such a huge financial liability if I do injure myself and like I said these policies are fairly inexpensive overall so I highly recommend them.
Final Thoughts
This was something I just wanted to go into a little bit more depth on because I’ve had a lot of people ask me about this and I think it’s something that a lot of people don’t know about. There are several companies that offer this and I’ll list some different resources below of supplemental health insurance companies and different types of health insurance that you can get that are supplemental to your main plan.
But I just think as somebody who’s self-employed especially if you’re an individual who’s active or if you’re concerned about illness running in your family and potentially not being able to pay your deductible your out of pocket it just makes sense to have that and I think more people should know about it so I wanted to put that out there for you guys.
I hope this article was helpful. I thought that this was something that was really helpful for me and I think it’s important information to share out there as options for individuals who are self-employed and just have to afford their own health insurance and need some different options that are a little unique and that aren’t typically mainstream all the time. So I hope this helps and thank you so much for reading.
