Medicare Supplemental Insurance

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Retirement years are often associated with weekend golf trips, leisurely walks on the beach, and a few decades of relaxing. Before leaving the work force and enjoying retirement life, it’s important to examine health insurance plans and how expanded benefits through Medicare supplemental insurance might be required for true and total health insurance coverage.

medicare supplemental insurance

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This additional insurance is usually called “Medigap insurance” and is designed specifically to work alongside the benefits offered through different Medicare coverage options (of which there are several). The government doesn’t provide full coverage for everything that might happen during one’s retirement years, and so additional insurance coverage is often required.

Unfortunately, the way in which supplemental plans work with Medicare often confuses anyone who isn’t an expert in health insurance, so early planning and research ensures the highest chance for a safe and healthy retirement. 10 important topics to consider regarding Medigap plans include:

1. Medigap insurance offers coverage for a single person

Many couples who arrive at retirement will need a Medigap policy, but buying a single policy won’t cover both retirees. Each Medicare beneficiary requires separate Medigap supplemental plans. This is often a change from the plans utilized by a couple during their working years as it’s common for a family plan to cover everyone in the household. This can create some hassle in choosing a Medigap plan when one person in the marriage reaches retirement age, and the other person still has a few years to go.

2. Medigap insurance requires payments to the company, not the government

When making payments on the Medigap policy, money will be sent directly to the insurance provider, who must also be a company officially licensed to provide Medigap coverage in that state. It’s also important to consider that Medigap policies and payments aren’t available if a person has a Medicare Medical Savings Account.

3. Medigap policies are always renewable

A Medigap plan cannot be canceled due to health problems and will always be renewable as long as a person keeps up with the payments on the premium. If a retiree chooses to utilize general insurance instead of Medicare and a Medigap policy, it’s vital to realize that cancelation is still possible. Obtaining an official Medigap policy is the only way to guarantee sustained policy coverage despite health problems.

4. Medigap doesn’t cover everythingmedicare supplemental insurance

A number of items covered under traditional insurance policies aren’t covered under a Medigap option. Insurance for things like vision and dental care often requires an additional, non-Medigap policy. This might mean that a person or couple has Medicare coverage, a separate Medigap policy, and a third or fourth type of coverage for things like long-term care, hearing aids, and eyeglasses.

5. Timing counts with Medigap policies

One of the most confusing things about getting a Medigap policy and applying for Medicare is the timing for the application. Dropping or changing a policy at the wrong time of the year might result in some unfortunate financial penalties associated with the coverage changes. Speaking with an insurance agent regarding the timing for policy changes and sign-ups is essential for avoiding things like late enrollment penalties.

6. Comparison shopping is vital

Just like the purchase of any type of insurance policy during pre-retirement years, the purchase of a Medigap policy requires some comparison shopping. The costs of different Medigap plans definitely vary, and some insurance providers will charge completely different premiums for the same sort of coverage. Since most retired individuals are on fixed incomes, finding the lowest rate possible is imperative.

7. Medicare Advantage Plans and Medigap are incompatible

A Medigap policy cannot be combined with Medicare Advantage Plans (Part C). If a retiree decides to switch his or her Medicare coverage to the Part C, it’s likely that changes will need to be made to the Medigap policy. Although the Medicare Advantage Plan is incompatible with Medigap policies, that doesn’t mean that the choice of one type of policy or another is final. Changes may be made in certain circumstances.

8. Choosing Medicare Advantage isn’t always permanent

After enrolling in a Medicare Advantage Plan, it’s possible to switch back to the basic type of Medicare that works with Medigap plans within 12 months of enrollment. This means that if a retiree is unhappy with the coverage style of Part C that switching back is easy as long as it’s done within a year. In addition, it’s possible to get the original Medigap policy a retiree might have had before switching to Part C as long as the original insurance company still offers that option.

9. New Medigap plans don’t offer prescription coverage

Although Medigap policies used to cover prescriptions, that’s no longer the case. People who had prescription drug coverage with their Medigap plans a few years ago no longer have such coverage if they choose to change their policy. The only way to get prescription coverage today is with an additional policy or through the Medicare Prescription Drug Plan (Part D). It’s essential to obtain prescription drug coverage at the start of retirement since the price goes up over time if enrollment in Part D is tardy.

10. Medigap open enrollment lasts six months

Timing is everything with Medicare and Medigap policies. There is a 6-month window when open enrollment is available, and a future retiree can choose any policy offered in the state. The reason why choosing a Medigap plan during this window is critical, is because the insurance company can’t deny Medicare supplemental coverage for any reason due to health problems.

medicare supplemental insuranceGetting the best Medigap insurance policy does take some research, but getting a good rate and great coverage isn’t impossible. The best time to start researching Medigap policies is at least a year (if not more) in advance of a target retirement date. It’s essential to have as much knowledge as possible when choosing a Medigap plan, and that the choice isn’t made at the last minute when mistakes might be made in coverage type or policy cost.