As you reach your senior years, the likelihood that you will need expensive medical care increases. This is something none of us like to think about, and so in many cases we don’t. Rather than face our mortality, we would rather bury our heads in the sand and hope that everything turns out okay. But as with many things, it is far better to have medical insurance and not need it than it is to need it and not have it! In fact, the latter can lead to extreme levels of discomfort, pain, embarrassment, and poverty. This should be your absolute priority, and Medigap is one of the key things you need to think about as you reach your late 60s.
So just what is Medigap? In order to understand precisely what this is, it’s important to first understand Medicare.
Medicare is a product offered by the federal government to ensure that older individuals can afford the healthcare they need to live healthy, happy, dignified lives. If you are 65 and over and you are currently enrolled in social security, then you will automatically be placed on Medicare.
(If you are not on social security then you will need to sign up manually for Medicare, and failure to do so will result in your paying more for the same service. You can sign up to three months prior to turning 65, and up to three months after.)
Medicare will then provide basic coverage for a number of medical expenses. The program is split into four parts, with each part representing a different aspect of the cover1. These are:
- Part A – Covers hospital costs
- Part B – Covers routine care (visits from a physician, for example)
- Part C – Medicare Advantage Program (Bundles Part A, B and sometimes D into one plan)
- Part D – Prescription drugs
Medicare: What’s Missing
What’s also important in order to understand Medigap, is to look at what is missing from Medicare. The answer is that Medicare does not provide comprehensive cover for every eventuality that might affect the older population.
For example, although Part A covers hospital costs, this does not include 100% of all possible costs. Medicare will pay for hospital fees for 60 days (2 months) and following this, it will then be necessary for the patient to provide some of the funds. What’s more, is that once the patient has been in hospital for 90 days, the amount they are required to pay will increase to 100%. This is something that many people with serious illnesses simply won’t be able to manage.
Part B likewise will require monthly payments, while not all medication will be covered by part C. Medicare also does not include such things as medical alert systems, which can be an oversight for seniors that need these devices.
Another issue is that Medicare doesn’t help with hospice care. This can be a serious consideration for seniors that struggle with mobility, or with memory issues. Medicaid does offer this however2.
Medicaid is a similar program provided by a combination of the state and federal government that targets low income individuals, children, and others. Not everyone who is eligible for Medicare will also be eligible for Medicaid, but those that are may wish to consider getting both types of cover.
For everyone else, there is a third option: Medigap.
What is Medigap?
Medigap is essentially a type of health insurance that specifically provides the missing elements of Medicare. Also called Medicare Supplement Insurance3, this ensures that you are covered for all the things that are not included in Medicare. This makes it easier for you to take out additional insurance for a complete coverage, but without worrying about “double dipping” and wasting money by paying for the same coverage twice.
Keep in mind though, that Medigap policies still won’t cover every single eventuality. Often for instance, Medigap policies won’t include long-term care, vision, or dental care. Likewise, they won’t include hearing aids, eyeglasses, or private-duty nursing.
That said, some Medigap policies will include these things, so it’s worth reading the policies and terms thoroughly in order to ensure you are covered for everything you need. Ultimately, it is your decision to think about how much you want to spend per month on your premiums, and just how much cover you need in exchange for that expense.
Some things to keep in mind about Medigap:
- To apply for Medigap, you must have both Part A and Part B Medicare
- Medigap policies are different from Medicare Advantage Plans. Some of those plans are also provided by third party insurances.
- It is illegal for anyone to sell you a Medigap policy if you already have a Medicare Advantage Plan.
- You will pay a monthly premium to the private insurance company for your Medigap policy.
Hopefully this article has provided you with some useful information regarding Medigap and where it fits into your medical insurance plan. It’s time to do some thinking, and to choose the best option for you. Just remember: health is THE most important thing you can invest in.