Recently, I was contacted by a prospective client who had been going without a Medicare supplement insurance policy for a few years. She was in good health and did not feel the urgency to purchase a plan that would help fill in the gaps of Medicare Parts A & B.
In the insurance industry, it is not uncommon for agents to encounter consumers who have gone without different types of insurance for any number of reasons.
Sometimes it’s the cost and other times, it’s a calculated gamble. Some may be able to go their whole lives without doing much insurance planning and be no worse for the ware.
Unfortunately, that was not the case with my client. Her good health had kept her out of the hospital for quite a while until she had a health incident that required her to visit the emergency room. Her doctors ran several tests and she was kept overnight for observation until cleared to go home the next day.
Fortunately, her visit to the emergency room was a false alarm. She had experienced no major health event, but had felt poorly enough to make sure nothing was seriously wrong. It may have been nothing more than too much caffeine in her case.
After she left the hospital the next day, she returned to her normal daily activities and felt fine… until she received the bill for her stay. Medicare covered its portion, but her out-of-pocket costs were several thousand dollars. Several thousand dollars for a one night stay and a battery of tests and exams.
Her gamble to go without Medicare supplement insurance did not pay off. She called our agency and we helped her enroll in a policy so that she would never face these kinds of bills again. If she had owned a good Medicare supplement (like a Plan F, G or N) or even a Medicare Advantage plan, her portion of the hospital bill would have been a couple of hundred dollars at most – or nothing at all.
She is now covered and has very little to worry about should she face something like this again, but it was a real eye opener. Sometimes consumers are under the false impression that Medicare pays 80% of all claims and they are only responsible for the remaining 20%.
It does not work this way in all cases as there are several gaps in Medicare that can be more or less than 20% – and in some cases they can add up quickly – even for a brief medical event.
Some gaps in Medicare require the uninsured to cover a certain amount per day. In some cases, these per day costs can be over $500-$600. After only a few days, this can add up to a very large bill. Having some type of supplemental coverage can help to save the insured thousands of dollars if and when a large medical bill is encountered.
The other part of her story that is worth telling is that she was able to buy a Medicare supplement plan even after her health event. That’s because she was still in good health and her stay was a false alarm. If her event was more serious, then she may have not been able to purchase a Medicare supplement from us at all.
If you are not in your open enrollment window (age 65) or experiencing a qualifying event (losing group coverage for instance) then you will very likely have to undergo medical underwriting before you can buy a plan. And if you’re in poor health, then you can be turned down.
It’s important to remember that the times you want insurance the most, it may be hard to get it. Some policies have waiting periods (like dental insurance) and others require medical underwriting (long term care) that can cause an applicant to be turned down.
In other words, you must plan ahead. We have a saying in the insurance industry that really states the obvious, “The best kind of insurance you have is the kind that you don’t use.” No one wants a claim on their home, car, health or finances – but they happen. You buy insurance for the rainy day that you may or may not face down the road. To be sure, if you really need insurance, then it may already be too late.
Hyers and Associates is an independent insurance agency specializing in Medicare supplement insurance, Medicare Advantage plans, Prescription Part D policies, long term care insurance and annuities.
Contact us today to learn more about the insurance plans that can best fill the gaps in your long term plans.