Why You Need Medicare Supplemental Insurance

Folks approaching their 65th birthday need to start thinking about and enrolling in Medicare for health care coverage. If that includes you, you may wonder why you might need Medicare supplemental insurance. After all, doesn’t Medicare provide free health care for the rest of your life? If that were true, you wouldn’t need to buy additional coverage. But here is the unpleasant surprise that many Americans find out about Medicare: Medicare is not free.

Indeed, the federal health insurance program called Medicare does cover a substantial amount of the healthcare expenses you incur after you enroll, just like your current private insurance plan does. But just like your existing health insurance, Medicare doesn’t cover everything. You will remain personally responsible for out-of-pocket costs such as copayments, deductibles, coinsurance, and even premiums. As your healthcare needs grow as you grow older, so too will the amount of money you may have to spend on your care.

Filling In The Gaps

Covering those out-of-pocket costs that Medicare doesn’t is what Medicare supplemental insurance, also called Medigap coverage, is all about. As the name implies, Medigap coverage takes care of the “gaps” in Medicare coverage, paying for the costs of care – which can add up to tens or hundreds of thousands of dollars – that you would otherwise need to pay yourself.

Medicare supplemental insurance policies are issued by private companies rather than the government. These plans, which vary in cost, level of coverage, and area of availability, require monthly premiums that are significantly less than the expenses covered by the policy. You can choose or keep your doctor under a Medigap plan if the physician or clinic accepts Medicare insurance.

If you are fortunate enough to have unlimited amounts of cash at your disposal and won’t lose sleep over potentially spending a substantial portion of your retirement savings on your healthcare needs, you probably don’t need Medigap coverage. But if you’re like most of us, Medicare supplemental insurance is one of the smartest investments you can make.

What You May Pay Out-Of-Pocket Without Medigap Coverage

Calling the costs not covered by Medicare “gaps” is something of an understatement. They are more like chasms.

The Medicare chasms are substantial, and expenses can add up quickly. A quick glance at out-of-pocket costs for Medicare Parts A and B shows how much you could be on the hook for without Medigap coverage

Medicare Part A primarily covers inpatient hospitalization. While it covers up to 60 days of hospitalization without coinsurance or copays, you’ll still need to pay an estimated deductible of $1,556 in 2023.

After the 60th day (in a benefit period, meaning it doesn’t need to be 60 consecutive days), the out-of-pocket expenses can get truly out of hand. In 2023, it will cost you an estimated $389 in coinsurance every day for days 61-90 in a benefit period, a figure that grows to $778 per day for days 91 and beyond. If you are in the hospital for 150 days, your hospital coverage runs out entirely.

Cost-sharing under Part B is similar. You are responsible for the Part B deductible, which is $217 in 2023. After that, Part B only covers 80 percent of approved services. This means that you must pay 20 percent of the cost of all your doctor visits, lab and diagnostic tests, ER trips, surgeries, durable medical equipment, and even astronomically expensive treatments like chemotherapy.

But that’s not the worst of it. There is no lifetime cap on your copays and coinsurance like there is under your private insurance plan. That obligation will continue for the rest of your life. And for a condition like cancer, those expenses can decimate your retirement savings.

With a Medigap policy, you can protect your future and your finances from these costs at rates that fit your budget.

Contact Every Way Health To Learn More About Medigap Coverage

If you need assistance in choosing the Medicare supplemental insurance plan that’s best for you, please get in touch with Every Way Health at 877-460-3943.

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