Why Supplemental Health Insurance Is Your HDHP’s Best Friend
Jan 08,2026
Read Time 4 Minutes
In the United States, healthcare costs are rising, increasing the financial pressure on businesses and employees. In 2023, national healthcare spending reached $4.9 trillion, averaging $14,570 per person. As a response, more employers are offering high-deductible health plans (HDHPs) to manage premium costs, shifting more financial responsibility to employees. Starting in 2024, these plans covered 50% of private sector workers. While HDHPs offer lower premiums, they come with higher out-of-pocket costs — often in the thousands — before coverage begins. The median deductible for such plans was $2,750 in 2024.
According to the IRS, an HDHP in 2026 will have a minimum deductible of $1,700 for individuals and $3,400 for families, with maximum out-of-pocket expenses of $8,500 and $17,000 respectively. These numbers show the financial risks employees face before coverage starts.
Supplemental health insurance can help bridge those gaps. It covers some of the costs HDHPs don’t pay for, such as deductibles, copays, and coinsurance. It can also help with nonmedical expenses like travel, childcare, or lost income during recovery.
What Is Supplemental Insurance?
Supplemental health insurance refers to policies that provide added financial support beyond an employee’s healthcare plan. These plans pay fixed cash benefits, either in lump sums or daily payments, directly to the employee. The money can be used for anything, from medical bills to everyday expenses. Rather than replacing primary insurance, supplemental coverage works with it .
Addressing The HDHP Challenge
HDHPs can be attractive due to their lower premiums, but when an unexpected health crisis occurs — like a broken bone, hospital stay, or cancer diagnosis — the out-of-pocket costs can be overwhelming. Without sufficient savings, people are often forced into debt. The Kaiser Family Foundation reports that Americans owe at least $220 billion in medical debt. Around 14 million people owe over $1,000, and roughly 3 million owe more than $10,000. This financial stress doesn’t just affect households. It spills into the workplace. For many, this debt comes from events their HDHP did not fully cover. Without supplemental insurance, the financial shock from cost of care can be hard to absorb.
Key Supplemental Products That Fill The Gaps
1. Accident Insurance
This coverage pays cash benefits when employees are injured in an accident. Whether it is a broken ankle or concussion, employees receive a fixed amount that can be used however they need. For HDHP enrollees, it can offset large upfront costs like ER visits, imaging, or physical therapy.
2. Hospital Indemnity Insurance
A hospital stay, even one night, can cost thousands. Hospital indemnity plans pay a fixed daily amount for each day an employee is hospitalized, regardless of actual medical bills. These funds can help cover an employee’s deductible or nonmedical costs like rent or missed work.
3. Critical Illness Insurance
A diagnosis like cancer, heart attack, stroke, or organ failure can be financially devastating. Critical illness insurance provides a lump sum, typically $10,000 to $50,000, that can be used for anything from treatment to living expenses. This coverage helps bridge that financial gap.
4. Cancer Insurance
Cancer is physically, emotionally, and financially draining. AARP reports treatment costs can reach $150,000. Even with insurance, many face high out-of-pocket costs. For example, with 25% coinsurance on a $10,000/month drug, an employee could pay $2,500 monthly, more than half of the average American’s pretax income. Cancer insurance helps reduce this burden, covering treatments, medications, and nonmedical costs.
Enhancing Your Benefits Strategy
For employers, offering supplemental health insurance alongside HDHPs can also be a strategic advantage. Partners like Anthem can help employers strengthen their employee benefits packages with the right options for their workforce. Employers would need to assess workforce demographics and communicate how supplemental plans work alongside HDHPs. Employees could then compare supplemental plan options and weigh costs against potential out-of-pocket exposure, so coverage remains affordable.
From “Nice To Have” To “Must Have”
As HDHPs become more prevalent, supplemental insurance shifts from being an optional benefit to a financial necessity. It safeguards employees’ financial well-being when life throws unexpected health challenges their way. For employees juggling rising healthcare costs and everyday expenses, supplemental coverage is the missing piece that makes a high-deductible plan truly work. As workplace benefits offerings evolve in 2025 and beyond, a solid approach for employers would be to incorporate supplemental health products into an overall strategy and communicate them as essential companions to HDHPs.