Money Talks....
Thanks for joining us on this issue of Money Talks….we continue our series of “You don’t know what you don’t know.” Yesterday we talked about Medicare. Medicare covers 80% of an approved expense. You have to decide how you are covering the other 20%. Are you covering it be paying out of pocket or with a Medicare Supplement? Here’s what you need to know.
Medicare Supplement Insurance, also known as Medigap, is private health insurance that helps pay some of the out-of-pocket health care costs that Original Medicare (Parts A and B) doesn't cover, such as:
Deductibles
Coinsurance
Copayments
Here's a breakdown of key aspects of Medicare Supplement Insurance:
How it Works:
You must have Original Medicare (Part A and Part B) to buy a Medigap policy.
A Medigap policy pays after Medicare pays its share of covered health care costs.
You pay a monthly premium to the private insurance company for your Medigap policy, in addition to your Medicare Part B premium.
Medigap policies are standardized in most states, identified by letters (A, B, C, D, F, G, K, L, M, and N). Each lettered plan offers a specific set of benefits.
Insurance companies can only sell you these standardized policies. The benefits within each lettered plan are the same, regardless of the insurance company. However, premiums can vary.
Generally, Medigap policies don't cover things like long-term care, vision or dental care, hearing aids, eyeglasses, or private-duty nursing.
Why Consider a Medigap Policy?
Helps with Out-of-Pocket Costs: It can significantly reduce your expenses for deductibles, coinsurance, and copays under Original Medicare.
Freedom to Choose Doctors: With a Medigap policy, you can generally see any doctor or hospital in the U.S. that accepts Medicare. You don't need referrals.
Predictable Costs: By covering a significant portion of your out-of-pocket costs, Medigap can help you budget for your healthcare expenses.
Guaranteed Renewable: As long as you pay your premiums, your Medigap policy will generally be renewed each year.
Important Considerations:
Cost: You pay a monthly premium for your Medigap policy, which is in addition to your Medicare Part B premium. Premiums can vary based on the plan, the insurance company, your age, and where you live.
Enrollment Periods: The best time to buy a Medigap policy is during your 6-month Medigap Open Enrollment Period, which starts the first month you have Medicare Part B and are age 65 or older. During this period, you have a guaranteed right to buy any Medigap policy sold in your state. Outside this period, your ability to buy a policy and the premium you pay may depend on underwriting, which means the insurance company can consider your health.
Medigap vs. Medicare Advantage: Medigap plans work with Original Medicare, while Medicare Advantage plans are a way to receive your Medicare benefits through a private insurance company. You generally cannot have both a Medigap policy and a Medicare Advantage plan at the same time.
Prescription Drug Coverage: Medigap plans sold after 2005 generally do not include prescription drug coverage. If you need drug coverage, you'll also need to enroll in a separate Medicare Part D plan.
Choosing a Medigap Policy:
Understand the Different Plans: Compare the benefits offered by each lettered plan to see which one best meets your healthcare needs and budget.
Compare Premiums: Get quotes from different insurance companies for the same lettered plan, as premiums can vary significantly.
Consider Your Health Needs: If you anticipate needing a lot of healthcare services, a plan with more comprehensive coverage (though potentially higher premiums) might be beneficial.
Review Your Options Annually: Your healthcare needs may change over time, so it's a good idea to review your coverage each year.
Plan F was discontinued for those turning 65 on 1-1-2020. You can only get Plan F if you turned 65 prior to
1-1-2020,
Until next time,
Diane