What is Supplementary Major Medical (SMM)? Learn more about the key benefits!
“Supplementary Major Medical” (SMM) refers to compensating the remaining medical expenses when medical expenditures exceed the compensation limit of eligible coverage items.
Medical insurance plans with SMM available in the market generally compensate 80% of the medical expenses exceeding the coverage limit, with annual compensation caps ranging from $100,000 to $220,000. The covered compensation items vary depending on the policy. It’s worth noting that SMM also includes coinsurance , typically at 20%, meaning the insured must pay 20% of the excess amount.
Why You Need Supplementary Major Medical?
Medical inflation causes medical expenses to rise continuously, potentially exceeding compensation limits. This is when “Supplementary Major Medical” comes into play, compensating for medical expenses beyond the compensation limit , greatly reducing the financial pressure on the policyholder.
For a simple example, suppose Mr. Chan unfortunately falls ill and needs to be hospitalized for multiple examinations, with total miscellaneous hospitalization expenses of $30,000. However, in his medical insurance, the coverage limit for ” miscellaneous expenses ” is $18,000, leaving $12,000 uncompensated. If his medical insurance includes SMM with a limit of $100,000 and 20% coinsurance, he can receive a total compensation of $27,600, and Mr. Chan only needs to pay $2,400 out-of-pocket.
| SMM Compensation Example | |
| Actual Medical Expenses | $30,000 |
| ” Miscellaneous Expenses ” Compensation Amount | $18,000 |
| Remaining Uncompensated Amount | $30,000 – $18,000 = $12,000 |
| SMM Compensation Amount | $12,000 x 80% = $9,600 |
| Total Compensation Amount | $18,000 + $9,600 =
$27,600 |
| Coinsurance (Deductible) | $12,000 x 20%= $ 2,400 |
What Does Supplementary Medical Coverage Include?
Taking Bowtie VHIS Flexi Plan (Regular / Plus) as an example, the “Supplementary Medical Coverage” (SMM) reimburses 80% of the medical expenses exceeding the compensation limit for the relevant items (adjusted according to the ward level). The coverage items and annual compensation limits are as follows:
| Bowtie VHIS | ||
| Flexi Plan | Flexi Plan | |
| Annual Compensation Limit | $120,000 | $220,000 |
| Coverage Items |
|
|
- *The compensation limit for intensive care is restricted by the number of days, not the daily compensation limit.
- 1The company has the right to request proof of the relevant written recommendation, such as a referral letter or a statement provided by the attending physician or registered doctor in the claim application form.
How Much Can SMM Save You?
Case Study 1
Taking Colorectal Cancer surgery – “Laparoscopic Colectomy” as an example, the total charge (median) at St. Teresa’s Hospital in 2021 was $172,859, including $102,000 in “doctor fees” and $70,859 in “hospital fees”, with the patient requiring 7.5 days of hospitalization.
If the medical insurance plan includes SMM, the expected reimbursement rate can increase from 74.9% to 93.6% .
| St. Teresa’s Hospital | Bowtie VHIS Flexi Regular – Reimbursement Amount | |
| Surgeon’s Fee | $102,000 | $60,000(*1)+
$21,000(*1)+ $960 x 7.5= $88,200# |
| Anesthetist’s Fee | ||
| Ward Round Fee | ||
| Ward Room Charge# | $750 x 7.5=$5,625 | Full Reimbursement ($5,625) |
| Operating Room Fee | $10,870 | Full Reimbursement ($10,870) |
| Abdominal MRI Diagnostic Scan (with Contrast) | $9,900 | $6,930(*2) |
| Miscellaneous Expenses (*3) | $44,464 | $18,000 |
| Supplementary Medical Coverage (SMM) | – | ($26,464 +$13,800) * x 80% = $32,211.2 |
| Total Surgery Cost | $172,859 | – |
| Estimated Reimbursement / Out-of-Pocket (Without SMM) | – | $129,625 / $43,234 |
| Estimated Reimbursement / Out-of-Pocket (With SMM) | – | $161,836.2 / $11,022.6 |
| Reimbursement Rate | – | 74.9% -> 93.6% |
- #Admitted for 7.5 days in a standard room for 3 to 4 people.
- 1Assume full utilization of the voluntary health insurance "surgeon's fee" and "anesthetist's fee" coverage limits.
- 2With 30% co-insurance, reimbursing up to 70% of the expenses.
- 3Assume miscellaneous fees = hospital fees - room charges - operating room fees - MRI diagnostic scan charges.
- * $26,464 (=$44,464 - $18,000) is the miscellaneous fees exceeding the reimbursement limit, $13,800 (= $102,000 - $88,200) is the surgeon's fee and anesthetist's fee exceeding the reimbursement limit.
Case Two (Provided by Senior Financial Planner Per Lam )
One Sunday morning, the phone kept ringing. Upon answering, I immediately heard Lydia’s unusually anxious voice. It turned out that the night before, her father suddenly experienced severe chest pain and difficulty breathing. Although the situation improved slightly by morning, Lydia was still very worried and planned to accompany her father to the hospital for a check-up, but she didn’t know whether to go to a public hospital or a private hospital .
Since Lydia’s father had medical insurance and was worried the condition might suddenly worsen, I immediately helped Lydia contact a cardiologist , and arranged for a detailed examination at a private hospital that same day.
The doctor performed various tests on Lydia’s father, including a stress electrocardiogram and CT scan . It was confirmed that one of his coronary arteries was severely blocked, requiring percutaneous coronary intervention, commonly known as balloon angio . The doctor performed the surgery on Lydia’s father the next day. Fortunately, it was detected early and the surgery was done promptly. After resting for a few days post-surgery, he was able to be discharged. The hospitalization lasted four days, with surgery fees and other miscellaneous expenses totaling about $150,000.
About a week after submitting the documents, the insurance company completed the approval, and Lydia received approximately $120,000 in compensation from the insurance company. Many readers, like Lydia, might wonder why it wasn’t full compensation of $150,000. How was the $120,000 compensation amount calculated?
Continuing with Lydia’s case as an example, the table below lists the hospital and doctor’s charges as well as the insurance company’s detailed reimbursements. It can be seen that the doctor’s ward round fees, hospital miscellaneous fees , surgical fees , and operating room expenses all exceeded the basic coverage limits . Hospital miscellaneous fees usually include various tests such as blood tests , cardiac ultrasound , stress electrocardiogram , and CT scan , which often easily exceed the basic coverage limits. Fortunately, this medical insurance includes SMM , where the insurance company covers 80% of the excess amount.
| Coverage Scope | Actual Expenditure | Reimbursement Amount | Difference |
| Basic Coverage | |||
| Room and Board | $3,798 | $3,798 | $0 |
| Doctor’s Ward Round Fees | $8,000 | $3,432 | $4,568 |
| Hospital Miscellaneous Fees | $20,694 | $9,750 | $10,944 |
| Surgical Fees | $70,000 | $29,250 | $40,750 |
| Operating Room Expenses | $41,835 | $11,700 | $30,135 |
| Post-Surgery Outpatient Care | $4,050 | $975 | $3,075 |
| Total | $148,377 | [a]$58,905 | $84,904 |
| Supplementary Medical Coverage (Reimbursing 80% of the amount exceeding basic coverage) | |||
| Supplementary Medical Coverage (SMM)
( = $84,904 x 80% ) |
[b] $67,923 | ||
| Total Reimbursement Amount (= [a] + [b]) | $126,828 | ||
Astute readers may notice that the operating room expenses in this case are higher than usual, and the supplementary medical coverage does not include the difference in doctor’s ward round fees. This is because the cardiac stent costs were allocated to operating room expenses, and SMM only covers doctor’s ward round fees starting from day 181 of hospitalization. Different insurance companies may handle this differently.
In summary, a comprehensive medical insurance policy is very important, and supplementary medical coverage is essential. When needed, you can choose to seek treatment at a private hospital . In this case, without supplementary medical coverage, the medical expenses to be borne would not be $20,000 but nearly $90,000. If you feel that the basic medical insurance coverage amount may not be sufficient, consider upgrading to a higher level of coverage plan.
In simple terms, Supplementary Medical Coverage (SMM) can make your protection more comprehensive!
Need a medical insurance with SMM? Bowtie VHIS Flexi Plan might help you! Apply now
