Who should buy supplemental health insurance?

If you’ve ever dealt with a serious illness, injury, or hospitalization, you know how expensive the resulting medical bills can be. In the United States, medical debt is all too common, with nearly 1 in 10 adults, or 23 million people, owing medical debt. This includes 11 million who owe more than $2,000 and 3 million who owe more than $10,000, according to the Kaiser Family Foundation. 

Supplemental health insurance is designed to help protect people from the out-of-pocket expenses that often accompany unexpected health events. This coverage is meant to be purchased in addition to primary health insurance, not to replace it, and it pays benefits regardless of other plans. Cash benefits are paid directly to policyholders or someone they designate, not to doctors or hospitals, meaning the money can be used for any need, including medical bills, house payments, and groceries. 

So, who should buy supplemental health insurance? Below, we’ll cover three groups of people who could benefit from this coverage. 

1. People who have employer-sponsored health insurance 

Many people obtain health insurance through their employers. While these policies provide essential coverage, they can also leave workers vulnerable to high out-of-pocket expenses. 

Over 55% of American private-sector workers are enrolled in high-deductible health plans (HDHPs). In 2025, the minimum annual deductible for an HDHP is $1,650 for individuals and $3,300 for families, with these amounts only increasing. A deductible is the amount a person must pay for covered health services before their insurance policy begins to pay benefits. 

Workplace health insurance policies often result in employees facing high copayments and coinsurance, which can quickly accumulate to thousands of dollars in out-of-pocket costs in the event of a serious illness, injury, or hospitalization. 

Supplemental health insurance offers valuable protection against gaps in employer-sponsored coverage by providing direct cash benefits when needed most. 

2. People who have private or Affordable Care Act health insurance 

With the rise of independent work and entrepreneurship in the U.S., more Americans are becoming responsible for their own health insurance, often opting for private or Affordable Care Act plans. 

These plans can be expensive and may leave individuals exposed to high out-of-pocket costs. For instance, in 2025, the maximum out-of-pocket limit for an Affordable Care Act plan is $9,200 for individuals and $18,400 for families. A cancer diagnosis, heart attack, or stroke can easily subject someone to high deductibles, copayments, and coinsurance until they reach this annual out-of-pocket limit. 

Supplemental health insurance is an excellent solution for anyone with a private or Affordable Care Act health plan who wants to reduce their financial risk. 

3. People who have Medicare 

Medicare is a federal health insurance program for people 65 or older, some younger individuals with disabilities, and those with End-Stage Renal Disease. While Medicare offers substantial coverage, it was never designed to cover all health care expenses. 

Medicare Supplement insurance and Medicare Advantage plans are popular options that help cover Medicare’s gaps. However, these plans pay providers directly rather than policyholders and still leave individuals responsible for out-of-pocket costs. 

Supplemental health insurance, with its direct cash benefits, is an excellent complement to Original Medicare, Medicare Supplement insurance, and Medicare Advantage plans. 

Supplemental health insurance provides crucial financial protection by offering direct cash benefits that can cover out-of-pocket expenses. Whether you have employer-sponsored insurance, a private plan, or Medicare, this additional coverage helps ensure that unexpected medical costs don't become a financial burden.