While most people are familiar with the standard health, life and auto insurance policies they may have, the value of others may not be as clear. Everyone’s personal financial health is different, and what works for one person may not be as beneficial for another. That said, there are some specific insurance policies that millions of seniors and older adults could greatly benefit from. Long-term care insurance, which covers the care seniors may need with an assisted living facility or in-home caretaker, is one such policy.
The other is Medicare supplemental insurance.
To determine if this insurance type is valuable for you and your loved ones, however, it’s important to know exactly how it works. With this knowledge, you’ll better be able to determine if this insurance actually is worth it for you — or if it’s worth skipping for something else instead.
How does Medicare supplemental insurance work?
While some insurance policies can be complex and difficult to navigate, Medicare supplemental insurance, also known as Medigap, is fairly easy to operate. This supplemental insurance will cover the gaps in coverage left over by regular Medicare. You’ll need to purchase this extra protection from a private insurer, and you’ll only be eligible to purchase it if you already have Medicare. So you’ll need Parts A and B already before you’re supplemental-qualified.
Despite the varying insurance companies offering this type of coverage, all Medigap policies are standardized, according to Medicare.gov. “This means, they offer the same basic benefits no matter where you live or which insurance company you buy the policy from. There are 10 different types of Medigap plans offered in most states, which are named by letters: A-D, F, G, and K-N. Price is the only difference between plans with the same letter that are sold by different insurance companies.”
But once you get it, how does it operate? It does this by simply paying some (or all) of the difference left to you after your original Medicare has already kicked in. This can go a long way by paying for items like copayments, deductibles and more. Policyholders will be responsible for any remaining balance left after Medicare and the supplement have been applied, although that amount is likely to be significantly smaller than it would have been if you didn’t have a supplement to help out.
That all being understood, Medicare supplements are one per person. So if you have a spouse who also needs coverage, you’ll need to get a policy for them as well.
Benefits of Medicare supplemental insurance
The huge, obvious benefit of Medicare supplemental insurance is the help it can provide in reducing your leftover Medicare bill balances. But there are other advantages to be aware of as well. Here are two:
Freedom to choose providers: Unlike many health insurances, you won’t have to worry about in-network or out-of-network concerns with a Medicare supplemental plan. As long as your current provider accepts Medicare, they’ll also accept your supplemental, regardless of which one you have.Plans can’t be canceled: If you’re concerned about a coverage lapse as you age, don’t be. Medicare supplemental plans can’t be canceled on you, regardless if your health deteriorates, as long as you continue to pay your premiums on time (but don’t let them lapse, as that could cause issues).
The bottom line
Medicare supplement plans operate in a straightforward manner by covering the costs that have spilled over after your regular Medicare coverage has been applied. From there, you’ll be left with a minimal balance to pay (assuming the supplement hasn’t left you covered in full).
But there are other benefits to a Medigap plan besides the additional coverage. With a Medicare supplement, you’ll enjoy the freedom to choose the healthcare professional you’re comfortable with, as long as they’re also accepting Medicare. And you won’t have to be concerned about a plan being canceled down the line. As long as you pay your premiums on time, Medicare supplemental insurance plans will remain guaranteed renewable.
Have more questions? Learn more about Medicare supplemental plans here!