How to Choose a Medicare Supplement Insurance Policy

Once you qualify for Medicare, you’ll probably find yourself breathing a sigh of relief. All your medical bill worries are over, right? Unfortunately, that’s not the case. There’s more than one form of Medicare, and Medicare doesn’t cover everything. Medicare supplement insurance, or “Medigap” coverage, is designed to ensure you are never forced to bear more out-of-pocket medical expenses than you can afford.

What You Need to Qualify

In order to qualify for Medigap coverage through a private insurer, you must:

  • Already be enrolled in Medicare Part A and B.
  • If you’re married, prepare to pay for your and your spouse’s Medigap coverage separately.
  • Pay a separate monthly, quarterly or annual premium for Medigapin addition to any premiums you pay for Medicare Part B.
  • Purchase Medigap from a private insurer licensed to offer coverage in your home state.
  • Prepare for Medigap not to cover prescription drugs (unless purchased before 2006). Medicare Part D offers prescription drug coverage.
  • Not already have a Medicare Medical Savings Account.

You can actually get an MSA after you get Medigap in some instances. Once you’ve purchased Medigap, speak to your provider about your MSA options.

How Much Coverage You’ll Need

Once you’re sure you qualify for Medigap, determine what kind of plan you might need. For example, the older you are, the more at risk you are for health problems. If you have a prior health condition, you’re also at greater risk for large medical treatment bills. If a large medical bill would significantly deplete your savings or if you live paycheck to paycheck, you’re in greater need for coverage in case you end up stuck with a large bill. On the other hand, if you’re relatively young and healthy and have a comfortable amount of savings, you could make do with minimal Medigap coverage.

Deciding What to Cover

There are twelve basic Medigap policies. Each offers similar coverage that will cover Medicare Part A coinsurance and hospital costs not covered by Medicare after you meet your deductible. Otherwise, the plans differ as to what they cover, but they may include:

  • Medicare Part B coinsurance/copayment
  • First three pints of blood provided in surgery
  • Part A hospice care coinsurance/copayment
  • Skilled nursing facility care deductible
  • Medicare Part A deductible
  • Medicare Part B deductible
  • Medicare Part B extra charges
  • Foreign travel emergency hospital visit

Some plans provide partial cost coverage on some of these items, and some plans do not cover some of these items at all. The less the plan you choose covers, the less it’ll cost you each month. However, like all insurance, you’re gambling that you won’t get a big bill if you opt for minimal coverage.

In general, Medigap plans do not provide coverage for long-term assisted living costs or in-home nurses. Some plans cover the deductibles or copayment that Medicare does not for these types of expenses, but they do not cover these items if Medicare doesn’t provide any coverage for them first.

3 State Exceptions

Most states offer the same twelve basic Medigap plans through individual insurers. However, Wisconsin, Minnesota and Massachusetts offer their own variations. Coverage in these states is similar to that offered in the other 47 states, but it’s a good idea if you’re a Massachusetts, Minnesota or Wisconsin resident to contact a Medigap insurer and see what all of your options are.

Regardless of where you live, simply contact a Medigap coverage provider or attend an online seminar for the opportunity to ask any questions. Insurance providers want you to find the plan that’s most suited to you, and they’ll be happy to help you make that final decision. Still, it doesn’t hurt to have a good idea of what Medigap plan you hope to choose beforehand.

Choose the right Medicare supplement policy to protect your future. A sudden health problem could leave you with a bill you can’t afford to pay—or perhaps worse, you may not be able to get the treatment at all, simply because it falls outside of your Medicare coverage. Plans are available at such low monthly premiums, the typical Medicare beneficiary can’t afford to risk going without one.

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