Medical insurance is one of those areas that most people avoid revisiting once they have a policy in place. It can be both confusing and overwhelming to weigh the various available options, and it is often not clear what other types of options are out there for you. In addition, having the right amount of insurance coverage is even more critical as you age when medical costs tend to rise. If you are a senior who is insured through Medicare, various supplemental plans exist that can help with your current and future medical costs. By not considering the supplemental medical insurance available to you through Medicare, you may be paying more than you need to pay for everyday medical expenses.
Keep reading if you are looking to determine the best type of supplemental insurance to pay for these common out-of-pocket expenses. Here we tell you all that you will want to know to make sure you have the best Medicare coverage.
If I Am Enrolled in Medicare, Why Do I Need Additional Coverage?
Medicare is a great basic health plan that automatically applies to everyone once they turn 65. Medicare Part A does not cost anything for subscribers, but additional premiums apply for other parts or supplements. Most people choose at least some additional parts to add to their Part A plan due to its very basic coverage.
When you first enroll in Medicare, you will decide whether you want to enroll in Original Medicare (Parts A and B) or the Medicare Advantage plan (Part C). The Original Medicare plan (which includes Parts A and B) covers many healthcare needs older adults frequently have, such as hospital stays and doctor visits. However, it also leaves many of these subscribers to pay for certain health-related costs on their own. For example, suppose you take any amount of prescription drugs regularly. In that case, you will want to consider adding the Medicare Prescription Drug Plan (Part D), which offsets the costs related to these expenses. You can separately purchase this Part D plan. It also does not cover the total cost of co-pays, and you may be responsible for coinsurance or deductibles.
If you choose the Medicare Advantage plan, your policy will bundle Parts A, B, and D into one premium. It may include additional benefits as well (usually vision, hearing, dental). You purchase Medicare Advantage plans through private companies (not through the government) as an alternative to the Original Medicare Plans. You can read more about the differences between the two plans and choose the best one to meet your needs by looking at this comparison chart.
What Other Supplemental Insurance Is Available?
Some people do fine with the Original Medicare or Medicare Advantage plans, but others may require more coverage to offset medical costs. Even with Part A and B coverage, approximately 20% of costs fall under your out-of-pocket responsibility. For this reason, “Medigap” plans exist. These plans fill the “gaps” in the Original Medicare policy. Subscribers purchase these plans through private companies, but the companies that offer them must all have the same standardized benefits. However, plan availability and premiums may vary, and not all states offer all of the different plans.
You can use your Medigap insurance to pay for expenses such as co-pays, deductibles, and coinsurance. Some Medigap plans also provide coverage for additional costs associated with hospice, skilled nursing, and foreign travel emergencies. There is often an out-of-pocket limit on what they do not cover.
One of the most purchased supplemental Medigap plans is Part G. This plan covers 100% of your deductibles for Part A and Part B and coinsurance. It also covers 100% of the costs associated with hospice care or a skilled nursing facility. However, another plan may work better for your individual needs. Review this Medigap chart to compare the supplemental plans available and what they cover.
When Can I Enroll in Supplemental Plans?
It would be best to enroll in any supplemental plans during your Medigap Open Enrollment Period. This period begins during the month that you turn 65 and upon the start of your Part A and Part B Plans. During the period of open enrollment, you have the option to purchase any of the supplemental Medigap policies that your state sells, even if you suffer from pre-existing health conditions.
If you miss this open enrollment period, you may have to pay more money to enroll, or your health status may affect your enrollment. Certain situations give you Guaranteed Issue Rights, which means that an insurance company must offer you Medigap policies if you meet the conditions. You must familiarize yourself with these situations to know if any ever apply to you.
As a general rule, you should start looking at the policies available in your state before your open enrollment period begins. That way, you will have a good idea of which plan you want to add. Use the Medigap Policy Finder here to see which ones the state where you live offers.
What Other Important Things Do I Need to Know About Supplemental Plans?
Note that although the supplemental plans help alleviate many of the common expenses that Original Medicare does not cover, these plans do not cover the following:
- Non-skilled long-term care (like a standard nursing home)
- Vision services/dental services
- Private nursing (home-based nursing)
- Hearing aids
- Eyeglasses
- Prescription Drugs (you will need to enroll in Part D for this coverage)
In addition, you can only purchase Medigap insurance if you have enrolled in the Original Medicare plan. If you have the Medicare Advantage plans offered by a private company, you cannot add one of these plans. If you currently have a Medicare Advantage plan and want supplemental Medigap coverage, you must first switch back to Original Medicare.
Finally, once you have a supplemental policy in place, you will keep that policy regardless of any health problems, as long as you pay the premiums for your Medigap policy and your Part B coverage.