Supplemental Medicare plans are plans that “follow” behind Medicare and fill in the gaps in coverage in Medicare. These plans are also called Medicare supplements or Medigap plans, and they are sold through private insurance companies. There are a handful of these options out there and they vary by state, so it is important to be apprised of what’s available in your area if you are trying to determine if this type of a plan is a good idea for you. Here are a few considerations:
- First, you should understand what you have. Are you on an employer group plan now? If so, will that plan continue even after you go on Medicare? And, at what cost to you? If you do not have other coverage, such as a employer-based plan or retiree plan, will you plan to have only Medicare coverage?
- Next, it is essential to understand what Medicare does and does not cover. Medicare is relatively comprehensive coverage; however, it does “leave out” an unlimited 20% of medical costs at the doctor/hospital. In other words, if you have only Medicare – with no supplemental Medicare plan – you would be responsible for an unlimited 20% of costs at the doctor/hospital.
- Last, you should understand what a supplemental Medicare plan would do for you in order to decide if it would be a good idea. There are two types of plans available to those on Medicare – actual supplement plans and Medicare Advantage plans. It is important not to confuse the two. Medicare Advantage plans take the place of Medicare – they do not supplement it. The coverage is at a lower level, and although premiums are also lower, there are some things to consider such as network restrictions, future portability and long-term viability.
Your health is very important to your all-around well-being, particularly when you are of Medicare age. Because of that, it is wise to consider whether a supplemental Medicare plan makes sense for you. It can give you financial peace of mind as well as providing for good, long-term health.