Supplemental Health Insurance: Is it needed with Medicare?
“Do I need supplemental insurance with Medicare?” is a question that is sometimes asked by individuals getting ready to go on Medicare or individuals that are already on Medicare.
The short answer to this question – “Yes…”
Medicare Supplement insurance (or Medigap insurance) supplement fills the gaps of what Medicare doesn’t pay.
Under Medicare Part A and Part B there are deductibles, co-insurance and cost sharing that are the Medicare beneficiary’s responsibilities. The thing that is different about an insured’s responsibility under Medicare coverage is the fact that there is no limit to the amount that one is obligated to pay, unlike most other types of health insurance which have some form of a limit.
For example under Medicare Part B (Medical Insurance); Medicare pays 80% (of the Medicare Approved amount) and the Medicare beneficiary would be responsible for the other 20% – there is no limit. Now 20% is not a big concern for a routine Dr Office visit but 20% could represent a significant concern for a multitude of other procedures, treatments, tests or therapy’s.
Needed Protection in Addition to Medicare
A Medicare Supplement insurance policy is not a “good investment”; by that I mean you cannot expect that on the average year you will receive more in benefits than you have paid in premiums, and in actuality you don’t want to because that means you had the misfortune of needing more than just routine medical care.
Most of the cost that is built into the pricing of a Medicare Supplement is the cost to cover the large and catastrophic claims.
It is important to remember that you are purchasing protection; sure its nice to have the Dr’s Office visit paid for by insurance but it’s a whole lot more comforting having the quarter of a million dollar bill taken care of.
Fortunately the big medical bill’s don’t come along to often and may not come along at all BUT when they do you will be glad that you had a Medicare Supplement Insurance policy to pay what Medicare doesn’t.
When It’s Not Needed
It is important to add that people that are on Medicaid (available to low income individuals), individuals that have coverage through their employers, or retirees of certain government agencies, will for the most part not need to be concerned with purchasing a Medicare Supplement insurance plan.
When shopping for Medicare Supplement insurance it is important to work with an Independent Broker such as Reed & Associates as we will provide unbiased comparisons between different plans and companies without allegiance to one particular company!
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