If you’re currently on Medicare, you are probably keenly aware of everything that it covers. From surgery to physical therapy, this government entitlement benefit provides health insurance for Americans 65 and older who have worked into the system and are now retired. But although Medicare is relatively comprehensive, it doesn’t cover everything — which is why some people choose to purchase affordable Medicare Supplement Insurance plans to help fill in the gaps.
Also known as Medigap, Medicare Supplement Insurance is sold by private companies to cover the costs that Medicare doesn’t — like copayments, coinsurance, and deductibles. If you have significant healthcare needs, Medicare Supplement Insurance can be more economically viable than paying for each non-Medicare item separately. And because law regulates prices, you don’t need to spend too long deciding which company you’re buying your policy from — instead, you should consider what type of Medigap plan you need.
The different plans, which range from A to N, vary in the gaps they cover and the cost of the policy. Supplements include lifetime reserve, long-term hospital stays, hospice coverage, skilled nursing, preventative care, foreign travel emergencies, deductibles, and coinsurance. Plan F is the most comprehensive, covering all possible supplements; however, it is also the most expensive. Plan F has a high-deductible (HD) version, which has a $2,200 deductible for 2017 and has lower rates in most states than a traditional Plan F policy.
Plans G and N also cover a significant number of supplements and may grow in popularity due to new legislation which bans the sale of supplements that cover the Part B deductible, starting in 2020. Plan G fills all the gaps in Original Medicare except for the Part B deductible, which is fairly small — only $183 in 2017. In comparison, Plan G premiums can cost up to $20 less per month than Plan F. Plan N also does not cover the Plan B deductible as well as Part B Excess Charges, but it covers office copays instead — providing a maximum of $20 for doctors and $50 for ER visits.
Unfortunately, the one thing Medicare Supplement Insurance doesn’t cover is prescription drug plans. These plans still have to be purchased separately under Medicare Part D. Another consideration is that depending on your income, you may be charged more for Part D (as well as Part B), which may affect your decision of which Medigap policy to purchase. Something else to keep in mind is that Medigap only covers insurance for one person, so if you want to get supplemental insurance with your spouse, you will need to purchase two policies.
Medicare Supplement Insurance is popular because it helps insure medical expenses that Original Medicare doesn’t cover — so if you expect to need any of services that happen to be Medicare gaps, like hospice care or foreign travel emergency care, it makes sense to buy Medigap so that these gaps are filled. On your own, you can rack up a bill worth tens of thousands of dollars, which is why many people choose to purchase an insurance policy instead. Medigap is also helpful if you expect to have a high deductible or high copayments, which specific policies can cover for you.
Medicare Supplement Insurance is also becoming more critical as more and more people are eligible for Medicare. In the United States, nearly 11,000 people will turn 65 each day for the next 13 years, and almost 20 percent of the population will be 65 or older by 2030. The addition of so many Medicare-eligible Americans means that the system will be stretched to its limit — which makes it even more crucial to have insurance that can help fill in the gaps in Medicare coverage. Medigap policies are automatically renewable, which means that even if you develop health issues that start costing the insurance company a lot of money, they are not legally allowed to prevent you from continuing to pay your premiums.
Finally, it makes sense to pick the insurance company that provides the better discount, customer service, and rate stability for Medigap insurance. However, the list of companies offering Medicare Supplement Insurance is long, and you don’t want to spend time calling each one to determine their policies and offers. That’s why it makes sense to go through a reputable brokerage that provides you with each company’s rates at no additional cost and advise you as to the best place to purchase your insurance.
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Category: Medicare Supplements