Introduction to Medicare Supplements
Why You Need to Consider Medigap
The Medicare system is a great way for seniors who don’t have coverage through employers or unions to gain health insurance benefits. After paying into the system throughout their working lives, seniors are able to enjoy PartAwithout a premium and Part B with an affordable premium. However, there are still other out-of-pocket expenses they must consider. These include:
- Copayments: Copayments are fixed amounts that one must pay when visiting a medical practitioner or healthcare facility. These are usually small amounts that are listed in the policy.
- Deductibles: A deductible is a baseline out-of-pocket amount that must be spent by the insured before Medicare or a Medicare Advantage Plan begins paying for medical expenses. Deductibles can be per incident or per year depending on the plan and situation.
- Coinsurance: After the deductible has been met, some Medicare recipients will find that they must share the burden of medical expenses with Medicare or their Medicare Advantage Plan. This sharing of financial responsibility is called coinsurance and is broken down into percentages. For example, the senior may be responsible for 20 percent of the Medicare-approved expenses and Medicare may be responsible for the remaining 80 percent.
Seniors, already concerned about their retirement savings providing a sufficient income throughout their retirement, can struggle to meet some of these financial requirements. For a small premium, a Medicare supplement or Medigap policy can help ease that burden.
FiveThings You Should Know about Medigap
- Medigap doesn’t just cover deductibles, copayments and coinsurance. It may also provide coverage for medical care needed when you travel outside the States. Original Medicare does not provide that coverage except in limited circumstances.
- Medigap policies themselves may have their own deductible, which must be met before benefits are paid out.
- Medigap policies do not cover multiple people, so each spouse needs to have his or her own policy.
- You cannot have both a Medicare policy and a Medicare Advantage Plan.
- Unlike with a Medicare Advantage Plan, with a Medicare supplement, you always know where you stand because they are required to adhere to certain federal and state laws.
Choosing a Medicare Supplement
There are many different Medicare supplements to choose from. Each one has its own combination of benefits, deductibles and expenses that you should evaluate to see which fits best into your life. Some of the plans offer limited underwriting so that even those in poor health can get coverage, while others have strict medical underwriting that provides cheaper premiums and fewer annual increases for its healthy set of policyholders. Still other plans allow for a higher deductible in order to reduce the monthly premium.
It’s well worth evaluating the differences among each of the Medicare supplement plans available as well as the benefits of a Medicare Advantage Plan to see which will best suit your life and your medical needs. Plans can be switched at any time(provided you qualify after medical underwriting),so if you select a plan and end up needing something different, you aren’t locked in. For more information about Medicare, please see our Introduction to Medicare A and B.