Approximately 10,000 baby boomers entire the retirement phase of their lives each day. How ready are they facing the golden years? Do they have the right knowledge and coverage when it comes to dealing with medical issues? Have they saved enough money in case an accident happens? Are they enrolled in the proper Medicare plan?
If you are a boomer or are looking after one, you may want to know these Medigap basics. The knowledge you will gain here may very well just save you money – or your life:
A Medicare supplement insurance plan is a policy sold by private companies. Also known as Medigap, this is a plan meant to cover the various “gaps” found in Original Medicare (Part A and Part B) plans. These “gaps,” such as coinsurance, deductibles, and copayments, can deplete a policyholder’s nest egg in a fast manner.
Putting the Medigap information into perspective, the savings one can get from a plan can be substantial. According to the Insured Retirement Institute, 45% of baby boomers have no retirement savings at all. Additionally, the majority of boomers rely solely on Social Security to cover for possible expenses. With seniors more prone to health care and medical attention, being enrolled in a significant plan such as Medigap may just be the tool to fruitful and enjoyable retirement years.
Another important detail that boomers should be aware of is the difference in a Medicare Advantage plan from a Medigap policy. Granted that both policies are eligible to Original Medicare owners, the main difference between the two is the coverage of benefits one can gain from a plan. Whereas Medicare Advantage policyholders are entitled to an in-network list of doctors and medical institutions, the benefits are lost once a policyholder requires assistance from experts out of the network. Also, Medicare Advantage plans do not have foreign travel coverage. This can be troubling for baby boomers planning to travel during the retirement years; even more so for seniors who need to travel to warmer climates during winter. Situational at most, but Medigap plans may offer a more flexible option for applicants. After all, there are ten standardized plans to choose from, to fit any individual’s particular needs or circumstances.
A common issue that baby boomers encounter when planning for the golden years is simply taking too much time to decide on a strategy. Delaying on an insurance purchase or not prioritizing a plan has its repercussions. For Medigap policies, not enrolling for one when you are first eligible may mean higher premiums. It may also mean a stricter qualification process, placing an applicant through a series of medical questions. This is because the older an individual gets, the higher a risk he or she may be for private insurers to cover.
We hope that you enter the golden years equipped with the proper tools. And please do share this article – we need more baby boomers to be aware of these Medigap basics.