5 Questions to Determine if You Need a Medicare Supplement Insurance Plan

If you’re one of the more than 60 million people enrolled in Medicare, you know that Medicare isn’t free. Medicare beneficiaries have many out-of-pocket costs, including premiums, deductibles, copays, and coinsurance. It can add up fast. 

To keep your costs under control without sacrificing the quality of your coverage, you need to enroll in the right plan for your needs. 

Medicare Supplement Insurance, often called Medigap, provides one option. You have several policies to choose from, but they all help with the out-of-pocket costs that occur in Original Medicare. 

Keep reading to see if a Medicare Supplement Insurance policy might be right for you.

Q: Are You Enrolled in Original Medicare?

To understand whether a Medigap plan might be a good option for you, you need to understand a little about how Medicare plan options work.

Medicare is broken down into four key parts:

• Medicare Part A provides hospital insurance. It covers things like hospital costs and skilled nursing care. 
• Medicare Part B provides medical insurance. It covers things like doctor visits and preventative services.
• Medicare Part C is a private alternative called Medicare Advantage offered by various insurance companies. These insurance plans combine the coverage offered under Medicare Part A and Medicare Part B. Many also include prescription drug coverage.
• Medicare Part D provides prescription drug coverage. 

This can get confusing, but it really comes down to two main choices for enrollees: Original Medicare or Medicare Advantage.

Enrollees who select Original Medicare enroll in Medicare Part A and Medicare Part B. They can also enroll in a Medicare Part D plan to obtain prescription drug coverage. They can select a Medicare Insurance Supplement plan to help manage out-of-pocket costs.

Enrollees who select Medicare Advantage enroll in one of the plans in their area. The plan includes hospital and medical coverage. Most plans also include prescription drug coverage, but enrollees in plans without prescription coverage can enroll in a separate Medicare Part D plan. 

Medicare Supplement Insurance plans are designed to work with Original Medicare. They do not cover out-of-pocket costs in Medicare Advantage. If you’ve decided to enroll in Medicare Advantage, a Medigap plan isn’t a good option. In fact, if you’re enrolled in Medicare Advantage, it’s against the law for anyone to sell you a Medigap plan unless they know you’re switching back to Original Medicare.

If you’re enrolled in Original Medicare, a Medigap policy can be a smart way of managing out-of-pocket costs. 

Q: Are You Going to Travel out of the Country?

Original Medicare does not typically provide coverage outside of the United States. If you are planning to travel abroad, you need to consider other health insurance options.

A Medicare Supplement Insurance plan is one way to get the coverage you need while traveling out of the country. 

Not all Medicare Supplement Insurance plans provide coverage for foreign travel, but several do. Medicare Supplement Insurance plans C, D, F, G, M and N all provide coverage for 80% of foreign travel emergencies costs, up to the plan limit.

Q: Do You Think You Might Require Hospitalization?

It’s no secret that hospital bills can be expensive in the U.S. Even if you have health insurance, you might end up paying a lot out of pocket, depending on your plan.

In 2021, Medicare Part A has a deductible of $1,484 for each benefit period. If you require care, you have to pay this amount out-of-pocket. You also have to pay coinsurance. For the first 60 days of hospitalization, the copay is $0. After that, however, the coinsurance jumps to $371 per day for days 61 to 90. If you have to stay in the hospital for more than 90 days, you’ll pay $742 per day for each of the 60 “lifetime reserve days” you have. If you use up your lifetime reserve days, you’ll have to cover all costs. 

Medicare Supplement Insurance plans cover 100% of Medicare Part A coinsurance, up to an additional 365 days after Medicare benefits are used. Most plans also provide full or partial coverage for the Medicare Part A deductible.

Q: Are You Worried About Surprise Bills?

Medicare Advantage plans have an annual out-of-pocket cap, but Original Medicare does not. This means that your costs can skyrocket if you become seriously ill and require expensive medical care. 

Medigap insurance plans keep these costs under control. We’ve already seen how Medigap plans help with hospital bills. Medigap plans can also help with Medicare Part B copays, Medicare Part A deductibles, and certain other out-of-pocket costs.

To enroll in a Medicare Supplement Insurance plan, you will need to pay a monthly premium. However, this can be a smart investment, and you may end up saving a considerable sum of money if you ever become ill. You will also benefit from more predictable medical costs so you’re able to budget accordingly. 

Q: Are You Worried about Your Future Health?

You might not be worried about hospital costs right now – but what about 10 or 20 years from now? If your health declines in the future, you could end up with major hospital costs.

A Medigap policy can help. Unfortunately, waiting until you become ill to enroll in a Medigap insurance plan may not be an option. 

When you first become eligible for Medicare, you are given a Medigap Open Enrollment Period. This open enrollment period lasts for six months, and it starts when you’re 65 and enrolled in Medicare Part B. During this open enrollment period, you can enroll in any available Medigap plan, and the plan cannot use medical underwriting to deny coverage or charge you higher rates. After this period is over, you can still apply for coverage, but the insurance company may deny coverage or charge more based on your medical history. 

The Right Medicare Supplement Plans for Your Needs

Selecting a Medicare policy is a high-stakes decision that will impact your healthcare and finances. If you are enrolled in Original Medicare, you should seriously consider enrolling in a Medigap plan to help with out-of-pocket costs. There are several standardized Medigap plans available to meet your needs.

Learn more about Medicare insurance and get a free quote today. If you prefer to speak with a licensed agent, call (833) 414-5520. We look forward to answering your questions.