If you’re currently receiving Medicare, or about to apply, you might be wondering: “Do I need a Medicare Supplement Policy?”
A Medicare Supplement Plan, also known as Medigap Policy, helps cover the expenses that Original Medicare leaves you to pay. It is intended to protect Medicare beneficiaries against high out-of-pocket expenses, including coinsurance, copayments, and deductibles.
Original Medicare includes Part A and Part B. Medicare Part A is your Hospital Insurance (e.g. inpatient hospital stays and skilled nursing care). Medicare Part B is your Medical Insurance (e.g. doctor visits and medical services such as blood tests, X-rays).
A Medicare Supplement Plan is worth considering in the following situations:
Frequent Hospital Stays
Do you expect to stay at a hospital at least twice over the course of the year? A Medicare Supplement Plan can cover the $1,340 deductible you are required to pay each time you are admitted to a hospital. Depending on your state, a Medicare Supplement Plan can cost as little as $94 a month (or $1,128 a year). So, even if you only visit the hospital as an inpatient twice a year, just for a short stay, you would owe $2,680 making a Medicare Supplement Policy worth purchasing.
Extensive Hospital Stays
In order for Original Medicare to cover the costs associated with long-term hospital stays, beneficiaries must first pay a daily coinsurance. The coinsurance can quickly add up, potentially costing you tens of thousands of dollars. If you anticipate the need for a hospital stay lasting longer than 60 days, a Medicare Supplement Plan is a smart investment that could save you from financial hardship. A Medigap Policy covers the $335 coinsurance paid each day for hospital stays lasting more than 60 days, and the $670 coinsurance paid each day for hospital stays lasting longer than 90 days.
Skilled Nursing Facility Stays
While Original Medicare covers the first 21 days in a Skilled Nursing Facility (SNF), a Medical Supplement Plan can help cover the $167.50 coinsurance paid each day for stays lasting between 21-100 days. For example, if you were admitted to a SNF and stayed for 100 days, a Medigap Policy could pay 50-100% of the $14,907 coinsurance you would owe.
Regular Doctor Visits or Home Health Care
Consider a Medicare Supplement Plan if you’re likely to visit the doctor as an outpatient frequently throughout the year or receive medical services regularly, such as blood tests and X-rays. A Medigap Policy can help pay the $183 deductible each year for outpatient doctor visits, plus the 20% coinsurance you are required to pay for medical services priced at the Medicare Approved Amount.
If you intend to travel extensively outside the United States in retirement, a Medicare Supplement Plan can save you a great deal. Medicare Supplement Plans C, D, F G, M, and N cover 80% of emergency health care costs incurred while traveling outside of the United States. But, before you receive coverage, you must first meet a $240 deductible for the year.
Premiums Vs. Out-Of-Pocket Costs Vs. Financial Risk
When deciding whether a Medicare Supplement Plan is right for you, take a close look at the premiums. Are the monthly costs of the policy higher or lower than your expected out-of-pocket expenses for the year? As your medical needs are often unpredictable, these calculations can be difficult to determine. But sometimes, these decisions come down to peace of mind. An unforeseen long-term hospital stay, or worse a medical emergency overseas, could be financially devastating.
Do you Need More Information on Medicare Supplement Plans?
If you would like some assistance figuring out your potential healthcare expenses, Your Insurance Gal is happy to help! Please give us a call on (360) 771-1155.