Should you buy Supplemental Health Insurance? How many ways are there to say, yes, yes, yes?

The basic fact that you need to know about Health Insurance is that hardly any basic policy is going to be comprehensive enough to satisfy the needs of any person who is properly managing his financial affairs. This may seem to be an indictment of the Insurance Industry, but it is not. The Insurance Industry is providing Life Insurance, Property Insurance, Annuities, and many other services that have helped manage and often eliminate the inherent risks of life.

So, why is Health Insurance different? It is because the cost of health care is out of control. The health care system in the United States is in a constant state of crisis because of spiraling costs. The Insurance Industry has tried to influence and manage this crisis, but it is not a crisis of their making, and their influence can only go so far. It is essential that any Insurance plan be successful. The definition of successful is that the Insurance plan makes a profit for the Insurance Company and covers the benefits of the insured. It is the payments of premiums that fund both of these goals.

When health care costs rise, premiums rise to match them. This can not be avoided. In the United States, the problem is that premiums would have to rise to unacceptable levels. The solution is to increase deductibles, add co-payment provisions, and reduce the number of covered treatments. Health insurance becomes catastrophic insurance. In other words, it helps soften the blow of a major illness, but does little to reduce the routine risks. In many ways, it rarely completely covers all of the consequences of major illness.

This is where supplemental health insurance comes into play. Supplemental health insurance fills the gaps that have opened in basic coverage. It provides for lost income and it also can cover out of pocket expenses caused by deductibles and co-payments. Supplemental health insurance is the Insurance Industry's solution to a problem that they recognize, but is not really of their making. It gives an individual affordable options. It puts control back in your hands.

So, should you buy supplemental health insurance, and how much should you buy? The answer to this question involves the application of the financial planning and risk management decisions that are geared to your own situation. Everyone is different, and income level, number of dependents, and even overall health are all factors that must be considered. What is important is that you recognize that most basic health insurance policies are full of pitfalls and gaps that can derail even the most careful financial plan.