Are you new to the world of Medicare insurance? Figuring out which types of coverages are right for you can be a complicated process. There are Parts A, B, and D, not to mention Medicare Advantage policies. There are also policies known as Medigap insurance, or medicare supplement insurance.
As the name suggests, Medigap insurance fills in the gaps in your Medicare coverage. It provides coverage for copays, coinsurance, and deductibles that may not be covered by Medicare Parts A and B. You pay a monthly premium to an insurance company for the Medigap coverage and the insurance company then pays for some or all of your out-of-pocket costs. Medigap policies can be costly and aren't available to everyone.
Is Medigap right for you? Below are a few instances when a Medigap policy could come in handy:
You have a prolonged hospital stay.
Medicare Part A covers your stay in hospitals, but only for a limited period of time and only after you meet your deductible, which is $1,556 in 2022. Once you meet your deductible, Medicare pays all costs for the first 60 days. You then pay $389 each day past day 60. And that cost goes up to $778 per day after day 90.
As you can see, if you're in the hospital for an extended period, the costs can add up quickly. A Medigap policy would help you cover some of those out-of-pocket costs. The exact amount of coverage you would receive depends on your specific policy.
You need additional services in the hospital.
Medicare Part A covers your costs in the hospital for the first 60 days after you meet your deductible. However, it doesn't cover everything. Medicare covers your stay in the hospital, which specifically means your bed while you are there. You will likely need other services that aren't fully covered by Medicare. For example, anesthesiologist services are not 100% covered, even if you're in your first 60 days. You'll have a 20% copay on those types of services. Again, these are costs that could be covered by Medicare supplemental insurance.
You're in the prescription drug donut hole.
Prescription drugs are covered by Medicare Part D, which offers affordable drug prices to retirees. However, there is a gap in prescription drug coverage that is often referred to as the "donut hole." It starts when you hit $4,430 in coverage in one year. After that point, you have a 25% copay on all generic prescription drugs until you hit $7,050, at which point the copay drops to 5%. This is another out-of-pocket cost that could be covered by Medicare supplemental insurance.
Wondering if Medicare supplemental insurance, or Medigap insurance, is right for you? Contact a Medicare insurance provider to discuss your needs and goals.
For more information, contact a company like The Retirement Cafe.