Medicare is an essential safety net for many people, but it doesn’t cover everything. It does not, for example, offer any protection against the costs of long-term care. Furthermore, as most people know from personal experience, health insurance premiums continue to rise year after year.
In some cases, these increases are substantial and put a strain on average individuals’ budgets. This makes adding a layer of protection through Medicare Supplemental Insurance (also referred to as Medigap) that much more important for anyone who wants to keep their current standard of living once they retire. Keep reading to learn more about this type of coverage and your options.
What Is Medicare Supplemental Insurance?
Supplemental insurance is a type of insurance that protects you from the costs of a specified set of circumstances that are not typically covered by another policy. In the case of Medigap, this type of insurance protects you against the out-of-pocket costs associated with Medicare coverage. This means that if you ever need to make a claim, you will not have to pay anything in addition to your monthly fee.
How Does Medigap Insurance Work?
Since there are ten different types of Medigap plans, it’s helpful to understand how each one works before you decide which one you want. The plans vary primarily in the level of out-of-pocket costs that they cover.
The standard Medigap plan, for example, covers 80% of out-of-pocket costs, leaving you responsible for the remaining 20%. Meanwhile, the most comprehensive Medigap policy, known as Plan G, covers 94% of all costs, leaving 6% for you to pay.
Which Medigap Plan Should You Choose?
As you’ve seen, Medigap plans differ in terms of the amount they cover and the types of coverage they provide. However, there are two other factors that you should consider when you’re looking for a plan. The first is your health. If you have a preexisting condition or take certain medications, you may be limited to certain plans.
If this is the case, you should make sure to check the plan’s list of “exclusions.” The second factor is your financial situation. If you have low income or assets, you may qualify for a special type of Medigap discount. Regardless of your circumstances, however, you should be prepared to pay a high premium.
How To Get Medigap Coverage
The easiest way to get Medigap coverage is to sign up for it when you first become eligible for Medicare. You can enrol during your Medicare enrollment period, which is the month that you turn 65 and the three months that follow. If you missed your opportunity to sign up for Medigap coverage when you first became eligible, it’s still possible to get coverage.
You can either sign up during the general enrollment period (January 1 to March 31 annually) or purchase a Medigap plan during a special enrollment period (SEP) due to a change in your circumstances.
While Medicare is a useful safety net for many people, it does not cover everything. This means that insurance coverage, in the form of Medicare Supplemental Insurance, can be helpful for many people.
However, you should understand that there is no such thing as a “one size fits all” Medigap policy. Your needs will vary depending on your health, your financial situation, and the level of care that you expect to need. Click HERE to learn more.