Over 62.8 million Americans (most over 65 years old) are enrolled in Medicare. And most of them are faced with the decision of signing up for a supplement plan, such as Medigap, to cover the cost-sharing aspects of Medicare (coinsurance, copays, deductibles). 14.4 million Medicare beneficiaries have a Medigap plan.
Medicare was developed to cover only a portion of your health care needs. It includes Part A (hospitalization coverage) and Part B (outpatient services and physicians). It covers only a list of services and shares the costs with you. When you acquire it, you must pick between three variants:
– You pay what Medicare doesn’t cover from your pocket
– Purchase a Medicare Supplement Plan
– Get an all-in-one policy (Medicare Advantage Plan).
Private companies sell Medicare Supplement Plans that are identified by capital letters A, B, C, D, F, G, K, L, M, and N. All letters provide the same standardized features; however, after January 1, 2020, Medicare beneficiaries can no longer get a Plan F or Plan C.
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Reasons to buy Medigap
Have you ever read a hospital bill in detail? Maybe one of your family members needed a routine surgery and had to spend a couple of days in the hospital. Chances are, their hospital bill is larger than they expected. Also, they probably got separate bills from different doctors involved in their treatment. Because Medicare doesn’t cover all hospital services and doctor bills, it’s a good idea to get Medigap to help you pay the remaining sum. A Medigap insurance plan has numerous advantages for beneficiaries.
Medigap removes most Part A and Part B out-of-pocket costs. Medicare requires you to pay a portion of the healthcare costs after deductibles. Original Medicare doesn’t have a limit on how much you can pay from your pocket, and Medigap policies can cover some costs.
Medigap offers long-term healthcare coverage. Medicare covers a limited number of hospital stays or time in a hospice or skilled nursing facility. Medigap offers additional time in these healthcare facilities. Medigap is a great aid if you suffer from a chronic illness and need expensive or frequent treatment. It saves you money when you need to stay in a hospital regularly to benefit from medical treatment. It’s more affordable to get Medigap than Medicare Advantage when you need frequent expensive treatment because it has cheaper monthly premiums.
Medigap can cover healthcare needs when travelling outside the USA. Medigap covers $50,000 healthcare needs when travelling abroad. If you need more coverage, you can buy travel insurance or medical evacuation insurance. Pricing depends on your travel destination, how long you’re away, your age, and your particular health history.
Medigap usually allows you to keep your healthcare specialists. However, before enrolling in Medigap, check with your medical specialists, hospitals, and healthcare facilities if they accept the insurance provider you want to work with.
Medigap doesn’t require referrals. Medigap doesn’t ask you to get a referral to see a healthcare specialist.
Medigap provides a broader doctor choice. Medigap offers a greater choice of doctors compared to Medicare Advantage. If you don’t have a Medicare Select Plan, Medigap doesn’t have a specific network of doctors.
When should you join Medigap?
You can get Medigap coverage after you enroll in Medicare Part B. Generally, there are two ideal time periods when you can buy Medigap without worrying about pre-existing health issues or medical underwriting.
– You turned 65 and got Part B, so you have six months to pick what Medigap policy you prefer.
– You’re older than 65 and losing employer coverage, so you need Medicare Part B and can purchase a Medigap policy in the following six months.
If you don’t enroll in Medigap during the 6-month window, insurance providers can ask you to provide medical underwriting or deny coverage. In some cases, you need to pay more for a Medigap policy because you don’t purchase it in the 6-month enrollment timeframe. You can switch the plan as time passes and get another coverage that suits you better. However, don’t stop paying your premiums on your existing policy before enrolling in a new one, and be ready to provide medical underwriting.
How is Medigap priced?
MedicareWire revealed that the average cost of Medigap insurance in 2020 was $154.50 monthly. However, you may not find it useful to know its average price, as the insurance plans vary from $50 to $300 monthly depending on what policy you pick, what coverage you need, and where you live. It may be helpful for you to find out what you’ll pay.
Premiums – the premiums for Medigap insurance are standardized. Each provider asks a different price for the same plan. The premium can cost you less if the insurer offers discounts for particular groups like married individuals or nonsmokers. You can pay less if you join a Medicare Select policy that provides coverage for a limited number of providers. You may also pay more if you enroll outside the initial open enrollment period. The insurance provider can raise the price based on your health state.
Deductibles – some Medigap plans ask you to pay the first $2,370 of healthcare costs before the policy kicks in. If you enroll in coverage that offers foreign emergency medical service, you pay $250 deductible for them.
How much Medigap insurance should you get?
When deciding what Medigap policy to buy, think about your health at age 65 and how healthy you might be in the following 10 or 20 years. Don’t overestimate your good health and status; consider your family health history, and weigh the costs and coverage to determine how much insurance you need. Since Medicare doesn’t offer family packages it is best to get coverage from different providers.
The main difference between Medigap coverage plans is how much they pay for you. While some offer 100% coverage for hospital visits, others pay for lower coverage. Talk to your doctor and ask them to help you decide what kind of coverage to get considering your particular needs.