Medicare is one of the most important programs for seniors heading into retirement. Even with the essential coverage provided by Medicare, retirees need to protect themselves from additional costs. According to a recent study by Fidelity Investments, a couple retiring today can expect to spend up to $200,000 on health care beyond what traditional Medicare covers. In order to protect yourself from rising medical expenses, it’s almost critical to supplement your traditional coverage with a Medigap policy. So how does Medicare Supplement Insurance work?
Traditional Medicare: What is it and what does it cover?
Before we go more in depth about supplement insurance, let’s cover the basics. Traditional Medicare is composed of two parts, Medicare Part A and Medicare Part B. Here is a brief breakdown of what each part covers:
Medicare Part A
- Inpatient care in a hospital or in a skilled nursing facility
- Skilled nursing facility care
- Home health care and hospice care
Medicare Part B
- Medically necessary services (services needed to diagnose or treat a medical condition)
- Preventative care services (health care to prevent or detect illness)
Medicare covers many of the expenses associated with the services listed above, but, without a Medicare Supplement Insurance plan, you will still be responsible for a number out-of-pocket costs. These costs include deductibles, co-payments, coinsurance, and excess fees, and they can add up quickly.
Medicare Supplement Insurance: What it is and How it Works
Medicare Supplement Insurance (sometimes called Medigap insurance because it fills in various gaps in coverage that Medicare does not cover) works in coordination with your traditional Medicare plan. It does not replace your insurance through Medicare. Instead, a Medigap policy will kick in to provide additional health care coverage as needed. Policies are provided by private insurance companies, and your plan will cover most of the out-of-pocket costs mentioned above.
When you become Medicare-eligible, you will have an initial enrollment period to choose a Medicare Supplement Insurance policy. This period begins the month you’re 65 and enrolled in Medicare Part B. This is the best time to enroll in a policy, as you cannot be declined coverage based on your health status. Even if you have a pre-existing condition, your plan will be priced the same as it is for a person in perfect health. After your initial enrollment period, enrolling in a Medigap policy may becomes more difficult as you may be declined coverage based upon your health.
There are currently 10 plans on the market, and you can learn more about each plan in another article on our site. Each plan is standardized across the industry, which means that a Plan G policy offered by one insurance company will be the same as a Plan G policy offered by a competing company. Each plan can be used wherever Medicare is accepted. There are no limiting private networks like those associated with Medicare Advantage plans.
With these protections and benefits in place, you can rest assured that you will receive the coverage you want and need. When selecting a plan, consider the following questions:
- What health care services do I use most often?
- How many out-of-pocket costs am I willing to pay?
- What is a premium cost that fits my budget?
Once you have these questions answered, selecting your Medicare Supplement Insurance policy becomes much easier.
Want to enroll in a Medigap policy? DirectMedSup can help.
If you have more questions or have an idea as to what plan may best suit your needs, DirectMedSup can help you make the right decision for you and your family. Give us a call today at 855-593-0069 to speak to one of our agents about specific plans or questions. We’ll work together to help you select the right plan at the best price.