Planning your medical insurance for retirement is a good idea, and if you already qualify and pay towards Original Medicare, you’re already off to a good start. Unfortunately, Medicare coverage has many exclusions that can create coverage gaps. To safeguard yourself from unwanted financial burden and additional medical bills, having extra health insurance like Medigap is a good idea.
Here’s our guide to understanding Medigap insurance.
- What is Medigap insurance? Also called Medicare Supplement insurance, Medigap insurance aims to cover gaps in Original Medicare. As it is not a replacement for Original Medicare, you will still require to pay your premiums for parts A and B.
- Medigap plans are standardized. Like Medicare, Medigap plans have letters from A to N assigned to each plan. While this could get confusing, the upside is that Medicare standardizes these plans. Benefits covered by each plan are the same irrespective of the provider you choose. Due to state laws, plans differ in Minnesota, Massachusetts, and Wisconsin.
- Cost of Medicare. Since private insurance companies provide Medigap insurance, you are required to pay fees in addition to your Medicare premium. The private insurance company sets the cost of the premiums depending on the type of plan chosen.
- Guaranteed renewal. With legislation in place to protect you, insurers cannot cancel your policy due to health issues. Medigap insurance is Guaranteed renewable if you get sick during coverage.
- Exclusions in Medigap. Although Medigap insurance has broader coverage, it also has exclusions. These could include:
- Prescription drugs
- Vision and dental care
- Eyeglasses and hearing aids
- Long term medical care.
- No family plan. As Medigap policies cover only one person, every person in the family has to avail of a separate policy and pay an additional premium.
- Enrollment. The online Medigap policy search page by Medicare is a useful tool to help you choose a plan that suits you best. After submitting some basic information, Medicare gives you options to compare shortlisted companies. As private insurance companies sell Medigap, you will have to compare the price of your chosen plan and the quality of the company before you sign up.
Choose a plan that you are comfortable with and that you can afford. Keep in mind that cheaper plans could leave gaps in coverage that could end up costing you more in the long term.
