Getting the Most from Medicare: When Medigap Makes Sense
As you evaluate your Medicare coverage options, you may be wondering whether purchasing a Medigap policy is right for you. Medigap is supplemental insurance that helps pay for costs left uncovered by Original Medicare, which includes Part A hospital insurance and Part B medical insurance.
This article explains what Medigap covers, how it works with Medicare, and when it might make financial sense for you.
What Medigap Covers
A Medigap policy helps fill gaps in original Medicare coverage. It reimburses you for some out-of-pocket costs you would otherwise pay under Parts A and B. These can include:
- Part A deductibles for hospital care
- Part A coinsurance for long inpatient hospital stays
- Part B annual deductibles
- Part B coinsurance for doctor visits and other outpatient services
Medigap generally does not cover vision, dental, hearing aids, eyeglasses, or private-duty nursing. Some plans offer limited emergency care when traveling overseas.
The most comprehensive Medigap option is Plan F, which covers all the gaps mentioned above. However, as of January 2020, Plan F is no longer available to newly Medicare-eligible people. If you already have Plan F you may keep it, but if you are seeking Medigap coverage for the first time, the most generous option is now Plan G.
It has nearly identical benefits to Plan F except it does not reimburse the $240 Part B deductible. Both Plan F and G offer complete supplemental coverage, with G being a more affordable option for newcomers to Medicare.
Shopping for the Right Plan
The level of coverage and precise benefits can vary between Medigap policies. All insurance companies structure their Medigap plans to offer the same letter-labeled benefit packages defined by Medicare. For example, a Plan G from one insurer provides the same coverage as a Plan G from another company. So it becomes a matter of price and service reputation when buying.
Monthly premiums differ significantly between insurance providers selling Medigap plans, even when the coverage is identical. Your age, gender, tobacco use, and zip code determine how much you pay. Premiums go up as you age and can easily cost over $250 monthly by the time you reach 85. It pays to compare multiple quotes when shopping for the best rate.
When Medigap Makes Sense
Medigap appeals most to people who want comprehensive coverage with predictable out-of-pocket expenses, flexible provider choice, and insurance that lasts regardless of health changes later on. Because policies are renewable, you can keep the same Medigap plan for life as long as you pay the premiums. Some key times when Medigap merits consideration:
Facing High Medical Expenses
If you have a medical condition that requires frequent doctor visits, tests, or procedures, your share of Part B costs may quickly add up. A Medigap policy providing coverage of the Part B coinsurance can prevent unexpected medical bills from breaking the bank.
Wanting Long Hospital Coverage
Under Original Medicare, hospital stays exceeding 60 days require hefty daily copayments from patients. Someone with an extended hospitalization can easily owe tens of thousands of dollars in a single year. For protection against astronomical copays, a Medigap plan is advisable.
Seeking Stable Pricing
Medicare premiums, deductibles, and copays increase in most years. In contrast, the pricing of Medigap plans remains consistent once purchased. This allows for predictable budgeting despite rising healthcare costs. Just be aware that insurance companies can still raise premiums generally on an annual basis.
Valuing Flexible Providers
Original Medicare gives you free choice of doctors and facilities participating in the program nationwide. Medigap works alongside that plan to broaden coverage. In contrast, Medicare Advantage HMOs and PPOs have restrictive provider networks you generally must use. If you want open access similar to having employer group insurance pre-Medicare, then Medigap combined with Parts A and B allows that.
Living Out of State Part-Time
Medigap plans provide health coverage as you travel anywhere in the United States. Medicare Advantage networks are usually limited to a particular region. So Medigap suits seasonal snowbirds and people who regularly visit family in other states.
Please call us for help and more information.
[return to top]
Getting Your Money’s Worth: When Return of Premium Life Insurance Makes Sense
Who Will Care for You? Long-Term Planning for Your Golden Years
Getting the Most from Medicare: When Medigap Makes Sense
Ambulatory Surgery 101: What You Need To Know About Costs and Coverage
Are You Making These 4 Life Insurance Mistakes and Putting Your Family At Risk?
The information presented and conclusions within are based upon our best judgment and analysis. It is not guaranteed information and does not necessarily reflect all available data. Web addresses are current at time of publication but subject to change. SmartsPro Marketing and The Insurance 411 do not engage in the solicitation, sale or management of securities or investments, nor does it make any recommendations on securities or investments. This material may not be quoted or reproduced in any form without publisher’s permission. All rights reserved. ©2023 The Insurance 411. www.theinsurance411.com Tel. 877-762-7877.