If someone is underinsured, they have health insurance, but it does not meet their healthcare needs, making the costs of care a financial burden.
There is no universal definition for being underinsured, but the following is often used to quantify this scenario.
- Someone’s out-of-pocket costs are more than 10% of their household income.
- The deductible is at least 5% of their income.
The number of people considered to be underinsured has increased with the growth of high-deductible health plans.
Sometimes, supplemental plans can help provide additional coverage, but they can also come at an extra cost. Supplemental plans may include coverage for:
- Hospital or fixed indemnity
- Long-term care
It’s also important to note that those who are underinsured still have the right to appeal decisions made by their health insurance company refusing to pay a claim.