+Out Of Pocket Costs
A Medicare Supplement, also known as Medigap, is a type of health insurance policy that is sold by private insurance companies and is designed to supplement Original Medicare (Part A and Part B). It helps pay for some of the out-of-pocket costs that Original Medicare doesn’t cover, such as deductibles, copayments, and coinsurance. Medigap policies are standardized, meaning that plans of the same letter (A, B, C, D, F, G, K, L, M, and N) must offer the same basic benefits, regardless of which insurance company sells it. Each letter plan is designed to fill a different gap in coverage.
When enrolled in Original Medicare
When enrolled in Original Medicare, beneficiaries can purchase a Medigap policy to help with the out-of-pocket costs, however, if they enroll in a Medicare Advantage Plan, they cannot use a Medigap policy to pay for costs that the plan doesn’t cover. Medigap policies can be used to cover costs that Medicare Advantage plans don’t cover such as emergency medical care while traveling abroad, or the extra cost of staying in a hospital longer than Medicare’s time limit.
It’s important to note that Medigap policies do not cover prescription drugs, and beneficiaries need to enroll in a separate Prescription Drug Plan (Part D) to get coverage for prescription drugs.
Top 5 Pros & Cons Of Signing Up For A Medicare Supplement (Medigap) Plan
Medigap plans are designed to help pay for some of the out-of-pocket costs that Original Medicare doesn't cover, such as deductibles, copayments, and coinsurance, this can help reduce the financial burden of unexpected medical bills.
With a Medigap plan, you can see any doctor or hospital that accepts Medicare, regardless of whether they are in or out of network, this can give you more options for care and providers. This is great If you are looking for the greatest amount of control of your healthcare decisions.
No Network Restrictions
Medigap plans don't have networks of providers that you must use. With Original Medicare and a Medigap plan, you can see any doctor or hospital that accepts Medicare, giving you more flexibility in choosing providers.
Coverage While Traveling Abroad
Some Medigap plans may cover emergency medical care while traveling abroad, which Original Medicare doesn't cover.
No Annual Out-Of-Pocket Maximum
Medigap plans don't have an annual out-of-pocket maximum, which means that you won't have to pay more out of pocket for covered services than you would with a Medicare Advantage plan.
Medigap plans can have higher monthly premiums than some Medicare Advantage plans, which can be a consideration for those on a fixed income or budget. Additionally, the premiums typically will rise each year by 3-5% which can sometimes make it unaffordable as seniors age.ent provider.
Prescription Drug Coverage
Medigap plans do not cover prescription drugs, beneficiaries need to enroll in a separate Prescription Drug Plan (Part D) to get coverage for prescription drugs.
Limited Coverage Outside Service Area
Medigap plans typically do not provide coverage when traveling outside of the service area, which can be an issue for those who travel frequently
Not Available To Those Enrolled In Medicare Advantage Plans
if you enroll in a Medicare Advantage plan, you usually can't use a Medigap policy to pay for costs that the plan doesn't cover.
Not Standardized In Some States
Medigap policies are standardized in most states, however in some states the plans may vary and may not offer the same coverage, this can make it difficult to compare plans and understand the benefits.
The Bottom Line
Is Medicare Supplement Right For Me?
Whether a Medicare supplement plan is right for you depends on your individual needs and circumstances. Here are some factors to consider:
- Your health care needs: If you frequently need medical care, a Medigap plan may be beneficial as it can help cover some of the costs not covered by Original Medicare. However, if you’re generally healthy and don’t require much medical care, a Medigap plan may not be as necessary.
- Your budget: Medigap plans have monthly premiums, so you’ll need to consider whether the additional expense fits into your budget. However, keep in mind that if you do require medical care, the out-of-pocket costs can quickly add up, making a Medigap plan a worthwhile investment.
- Your travel plans: If you travel frequently within the United States, a Medigap plan may be beneficial as it can provide coverage for medical care received outside of your home state. Some plans also offer coverage for foreign travel emergencies.
- Your eligibility: To enroll in a Medigap plan, you must be enrolled in Original Medicare (Part A and Part B). Additionally, you’ll need to apply for the plan during the open enrollment period or during a special enrollment period, which is triggered by certain life events.