What is a Medigap Policy and do I Need One?When you think of Medicare, you may believe that the program will cover all of your medical expenses.  However, this is often not the case.  While Medicare covers certain medical costs, it typically does not pay for copayments, deductibles, and coinsurance.  These “gaps” in total coverage can leave an individual with a serious medical condition having to pay significant out-of-pocket expenses.   To cover these costs, the Medicare recipient has to option to purchase a supplemental or “Medigap” policy from the private insurance market.  Here are some considerations regarding the necessity of Medigap coverage:

What You Can Expect from Medicare

Medicare has four parts; Part A which is hospital care; Part B which is for medical care; Part C which is Medicare Advantage Coverage; and Part D which is for prescription drugs.   As explained above, Medicare will not cover certain out-of-pocket expenses.  This is where Part C, Medicare Advantage Coverage, comes in.  This is an optional policy the recipient can purchase to help pay for the gaps in Medicare coverage.  The recipient also has the option of choosing to purchase a Medigap policy instead of Medicare Advantage.

Requirements to Get Medigap Coverage

To obtain a Medigap policy, you must also have Medicare Parts A and B.  You have to pay a private insurance company the premium for your Medigap policy, and this coverage is only for your care, not other household members.

Medicare Advantage v. Medigap

The supplemental coverage offered by Medicare Advantage and Medigap may differ.  For example, they may offer different coverage amounts for out-of-pocket expenses, the services covered, provider options, and location of services.  While Medigap typically costs more, these policies can also have lower out-of-pocket costs.  On the other hand, Medicare Advantage offers Part D prescription drug coverage which is usually not part of Medigap policies.  Both policies can usually be renewed even if you become seriously ill or injured during your term coverage.  It is also important to note, neither Part C nor Medigap will cover long-term care, dental or vision care, hearing aids, eyeglasses, or private nursing.  In the event you elect to supplement Medicare, it will be important to carefully examine the options presented by these plans and consider your circumstances and how each plan best addresses your needs today and in the future.

Having a strategy to supplement Medicare for your out-of-pocket expenses is advisable.  However, deciding if Medigap is the right option can be complicated.  Our office understands and works with others who focus on the best ways to prepare for and pay future medical costs.   Please contact us online or by phone if we may be of assistance. https://www.michiganestateplans.com/contact/

 

 

 

 

 

 

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