Are Medicare Supplement Plans Worth It?

Determining the value of Medicare Supplement plans

According to research published by the National Institites of Heakth about 25% of people who have traditional Medicare also have Medicare Supplement Insurance in addition. Medicare Supplement Insurance plans can offer financial stability and security because they decrease your unexpected out-of-pocket costs.

By understanding what these plans cover and what they cost, you can determine if the investment in supplementary coverage is worth it.

What is Medicare Supplement Insurance?

Original Medicare (Parts A and B) comes with certain limitations. Medicare Part A covers hospital-related costs, such as inpatient hospital care or nursing facility care. It also covers medical expenses for home health care and hospice services. Medicare Part B covers preventative care and services that are considered medically necessary. Combined, the two parts will cover about 80% of your costs.

Medicare Supplement Insurance, or Medigap, earned its name because it is designed to fill some of all of the 20% gap that Original Medicare doesn’t cover. These policies partially or fully cover copays, coinsurance, deductibles, and other expenses.

Do I qualify for Medicare Supplement Insurance?

In order to qualify for Medicare Supplement Insurance, you must already have Original Medicare (Parts A and B). If you have an active Medicare Advantage plan, you are not able to enroll in Medigap.

What do Medicare Supplement Insurance plans cover?

Medigap offers 10 options, Plans A, B, C, D, F, G, K, L, M and N. Here are a few of these plans’ key highlights:

  • All Medigap plan types offer the same basic benefits, but some offer additional coverage at a higher premium.
  • Plans K and L cover only a percentage of Part B coinsurance/copayment costs. All other plans cover them.
  • Although most plans cover the Part A deductible, only Plans C and F cover the Part B deductible.
  • Medigap Plans A, B, K, and L do not cover foreign travel medical care. All other plans cover it at 80%.

While these highlights are a good start, there are several other considerations to take into account when choosing a plan type. Our Comparison Chart, which can be found in our free downloadable ebook, breaks down coverage for each plan side-by-side.

How much do Medicare Supplement Insurance plans cost?

With a Medigap policy, you have a monthly premium to pay, which varies from one location to another (similar to regular health insurance). When insurers determine policy costs, they may use one of these methods:

  • Attained age-rated premiums: These are based on your current age and may increase in the future.
  • Issue age-rated premiums: These are assigned based on your current age and do not increase in the future.
  • Community-rated premiums: These are the same for all people of all ages in an area.

What you pay may be higher or lower depending on where you live, the type of policy you choose, and several other factors.

How to decide if a Medicare Supplement plan is worth it for you

These are some of the main financial points to focus on as you consider Medigap coverage:

  • The cost of lab tests and imaging — you’ll be responsible for 20%
  • How much you expect to pay for a nursing home stay through coinsurance
  • Your deductible costs associated with a hospital stay
  • How much 20% of your physician visits may cost — what you’ll be responsible for without a Medigap policy

Once you compare the price of a supplemental plan to your predicted out-of-pocket costs, you’ll be able to decide if a Medicare Supplement Insurance plan is right for you.

If you want help, United Medicare Advisors works with multiple insurance carriers to help you compare the cost of Medicare Supplement Insurance plans in your area. Our Licensed Agents are here to answer all of your questions and help you determine which plan is right for you. Give us a call at 1-855-655-9200.

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