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!
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:
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.
Basic coverage and Part A deductible coverage.
Basic coverage, Plan B coverage, Part B deductible coverage, and skilled-nursing coinsurance coverage (includes foreign travel coverage as well).
Basic coverage, Plan B coverage, and skilled-nursing coinsurance coverage (includes foreign travel coverage as well).
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.
Almost identical to Plan F; does not include Part B deductible coverage.
Offers a cost-sharing approach that will pay for Medicare coinsurance charges, copayments, and deductibles; policyholder must first reach his or her annual limit.
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.
Basic coverage, skilled-nursing coverage, Part A deductibles, and foreign travel coverage as well.
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.
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:
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.