Medicare Supplement Insurance: Financing Your Future

6 – Jun24 –Medicare Supplement Insurance Financing Your Future – Blog

Previously, we’ve discussed why a Medicare Supplement Insurance Plan (also called Medigap) is a great tool to secure one’s retirement. By addressing the expensive out-of-pocket health care costs that a significant number of baby boomers encounter, a policyholder can efficiently manage his or her finances during the retirement years.

Today, we’d like to share some more helpful pointers on how Medigap policies can help address both retirement financial and health needs. We hope that these simple guidelines will help more people attain the future they have always aspired for!

The Different Medicare Supplement Insurance Plans One Can Purchase

As mentioned in our last article, How Medigap Plans Secure Your Health and Money, Medicare Supplements work by helping policyholders pay for the “gaps” found in Original Medicare Plans. These gaps, such as coinsurance charges, copayments, and deductibles, can quickly drain one’s hard-earned savings if not addressed properly.

As cited by a Commonwealth Fund report, a significant number of Medicare beneficiaries (15 million policyholders) spent more than 20% of their household income on insurance premiums and out-of-pocket health care costs. Focusing on the gaps alone, an average amount of $3,024 per year can be seen – a costly figure to consider, especially for beneficiaries with chronic conditions or those with a low-income level.

As such, identifying the different Medigap solutions (there are ten standardized Medicare Supplement Plans to select from) will help one determine the best approach to take when planning for the future.

To give you an idea on which plan to choose, here’s a summary of what each plan can offer:

Medigap Plan A

Offers basic coverage (which other plans also offer) like coverage for Part A coinsurance fees and hospice expenses, Part B coinsurance fees, the first three pints of blood, and Medicare-approved preventive care charges.

Medigap Plan B

Basic coverage and Part A deductible coverage.

Medigap Plan C

Basic coverage, Plan B coverage, Part B deductible coverage, and skilled-nursing coinsurance coverage (includes foreign travel coverage as well).

Medigap Plan D

Basic coverage, Plan B coverage, and skilled-nursing coinsurance coverage (includes foreign travel coverage as well).

Medigap Plan F

Basic coverage, Plan B coverage, Part B deductible and excess charges coverage, and skilled-nursing coinsurance coverage (includes foreign travel coverage as well). Considered the most comprehensive insurance; also comes in a high-deductible form.

Medigap Plan G

Almost identical to Plan F; does not include Part B deductible coverage.

Medigap Plan K

Offers a cost-sharing approach that will pay for Medicare coinsurance charges, copayments, and deductibles; policyholder must first reach his or her annual limit.

Medigap Plan L

Similar to Plan K. Offers a cost-sharing approach that will pay for Medicare coinsurance charges, copayments, and deductibles; policyholder must first reach his or her annual limit.

Medigap Plan M

Basic coverage, skilled-nursing coverage, Part A deductibles, and foreign travel coverage as well.

Medigap Plan N

Basic coverage, Plan B coverage, Part B coinsurance (except for copayment of up to $20 for office visits and up to a copayment of $50 for emergency room visits), skilled-nursing coverage, and foreign travel coverage as well.

Maximizing Savings During the Open Enrollment Period

Aside from knowing the different Medicare Supplement Plans, make sure to purchase a policy during the open enrollment period (OEP). This begins when you turn 65 and are enrolled in Medicare Part B, the six-month period allows you these benefits:

  • You cannot be refused a Medigap policy that private insurance companies sell
  • You cannot be charged higher premiums
  • Your coverage start date cannot be delayed

Purchasing a plan during the OEP assures you of a convenient and easier application process. Additionally, please refer to online resources, such as a blog post or an infographic, for more information on when is the best time to purchase Medicare Supplements.

Please let us know if you have any questions below.

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