Is Medicare Supplement Insurance Right For You?

Medicare is available for people who are 65 or older or individuals that suffer from disabilities. Original Medicare, which is more of a basic form of the program, provides just the most basic form of coverage.

While original Medicare covers most of your medical and hospital bills, you’ll still have to pay for 20% of approved doctor treatments.

If you’re in the hospital for even three days, the cost of the hospital stay can be as much as $60,000. Paying 20% of these costs still leaves you with a $12,000 bill that you need to pay.

Medicare supplement insurance can help.

What is Medicare Supplement Insurance?

Supplement insurance, or Medigap insurance, is just like it sounds: insurance that fills in the gaps. For example, in the scenario above, this type of insurance would kick in and cover the $12,000 that original Medicare doesn’t cover.

Roughly 24% of all beneficiaries on Medicare purchase Medicare supplement Insurance

What’s Included in Medicare Part A and B?

If you’re on original Medicare, this means that you’re on both Medicare Part A and Part B. Medicare Part B covers about 80% of the costs for approved:

• Doctor services
• Medical equipment
• Outpatient therapy

On top of the 20% of the costs, you’ll be required to pay a deductible of just over $200 in 2021. While you may not pay for Medicare Part A, you will be responsible for paying for Part B if you want this additional coverage.

Supplement insurance is sold through private insurance companies and will offer additional coverage, such as:

• Costs of doctor visits
• Services rendered outside of the US

Insurance companies cannot disqualify you from these programs based on preexisting conditions either.

Cost of Medicare Supplement Insurance

Is this type of insurance worthwhile for you? It depends. You’ll be required to pay additional money to these programs, and they can be very expensive. While the average person paid $152 per month for supplemental insurance in 2018, prices may be much higher for the individual.

Depending on multiple factors, the cost of these plans can range from $50 to $650. Factors that contribute to the overall cost are:

• Age
• Location
• Deductible

However, some individuals may benefit from state programs that offer to pay for some or all of these costs.

Often, low-income individuals will qualify for state assistance, so they’ll benefit from low or no cost for their supplemental insurance. Additionally, there may be options to help cover the cost of prescription medications, too.

When considering whether signing up for one of these programs is the right thing to do, it’s important to note that Original Medicare does not have a limit on out-of-pocket expenses. So, you’ll continue to pay 20% out-of-pocket whether the bill is $200 or $2 million.

There are options outside of Medigap, such as Medicare Advantage plans that will roll Part A and B into one plan as well as offer prescriptions for free.

Medicare supplement insurance is often a good choice if you don’t have coverage through a union or employer and you’re enrolled in Original Medicare.