Becoming eligible for Original Medicare benefits is one of the changes you’ll experience as you reach retirement age. Millions of seniors rely on Medicare coverage to help pay for everyday medically necessary healthcare expenses like doctor visits and hospital care.
For many Medicare recipients, Medicare Part A (hospital insurance) is available with no premium required based on paid taxes while working. This is the inpatient portion of Medicare that helps to cover expenses associated with treatment while admitted to hospitals and skilled nursing facilities. Even if you receive premium-free Medicare Part A, there is still a deductible associated with utilizing your benefits.
If you choose to enroll in Medicare Part B (medical insurance),you’ll have coverage for outpatient services. This is voluntary coverage, but most people choose to enroll when they’re first eligible to avoid late enrollment penalties later. Part B usually comes with a monthly premium and you’ll have to pay an annual deductible before benefits apply. Although Medicare coverage is relatively affordable, your expenses can add up if you require frequent care. Many seniors wonder if there is a way to offset the costs of Original Medicare.
Why choose a Medicare Supplement (Medigap) plan?
Medicare Supplement insurance, also known as Medigap, helps pay for costs associated with using Original Medicare benefits. Medigap is not actual health insurance itself, but instead, it is a supplement to existing healthcare coverage supplied by Original Medicare.
Medigap does not help to cover monthly premiums, but plans may pay for other costs, including copays and coinsurance when you utilize Original Medicare. These are costs that are typically assessed on a per-service basis. Medicare Supplement plans are standardized by the federal government but are sold by private insurance companies. Costs and benefits can vary.
When you turn 65 years old and enroll in Medicare Part B, you’ll have a 6-month initial Medigap enrollment period. During this time, you can buy any Medicare Supplement plan sold in your state without undergoing medical underwriting. When this period ends, you may be charged more or turned down for a Medigap plan based on pre-existing conditions. The plan you choose should align not only with your current healthcare needs but also your anticipated future needs.
Compare Medigap coverage for copays, coinsurance and deductibles
Depending on the plan you choose to purchase, Medigap can help pay for a wide range of expenses. Some plans will cover some or all of your Part A and Part B copayments and coinsurance. Coinsurance is a predetermined split between Medicare recipients and Medicare for costs. For instance, Medicare Part B, the outpatient benefit, comes with coinsurance. You pay 20% for covered services while Medicare covers the remaining 80%.
Some Medigap plans may cover costs associated with meeting your Part A deductible. This is the amount that you will need to meet in healthcare spending each benefit period before your Original Medicare benefits begin to apply toward your inpatient hospital or skilled nursing costs.
Other Medigap benefits included in plans may include foreign travel, pints of blood, and out-of-pocket spending limits.
Identifying Medigap plans
Medigap plans have a letter associated with each type of plan. Lettered plans include different coverage options, so you’ll want to compare available plans against your specific needs. Medigap Plan A, for example, only provides coverage for basic benefits and Medicare Part B coinsurance, but Medigap Plan G provides more comprehensive coverage.
Does Medicare Supplement work with Medicare Advantage?
Medicare Advantage plans are an alternative to Original Medicare, but most plans provide additional benefits on top of the standard inpatient and outpatient coverage of Original Medicare. These plans are issued by private insurers, and while they are governed by the Medicare program, they also must adhere to state laws.
You also cannot carry both Medigap and Medicare Advantage at the same time. You may have either coverage, but not both.
How can I find Medigap coverage?
Finding Medigap coverage may be as simple as contacting health plan providers in your area. If you do this, keep in mind that the agent you work with will likely be limited to only representing insurance products from the company they represent.
As an alternative, you may consider partnering with an independent insurance broker who can impartially shop Medigap insurance products from a range of providers. This can often help you get the best deal for your specific needs.