Medicare is one of the largest government programs, and it helps provide health insurance coverage to millions of seniors across the nation. If you're enrolled in Parts A & B, you may assume that you have all of the protection that you need.
If you have original Medicare coverage, there are plenty of gaps that the program doesn't cover. Those left over expenses could leave you with a massive amount of bills and other debts. Every year, health care costs continue to rise, and there is nothing that you can do to stop the rising costs, but there are a few ways that you can protect yourself from those massive fees. One of the best ways to guard your savings is to purchase a Medicare supplement plan.
What is a Medicare Supplement Plan?
Medicare Supplemental Plans are sold by private insurance companies across the nation, and their purpose is to work with your traditional Medicare coverage to fill in the gaps left behind by Medicare Parts A & B. Unlike a Medicare Advantage policy, Medigap plans don't replace your regular coverage and you will still have to pay the premiums or your original plan as well as the premiums for your Medigap coverage.
There are ten different plans that you can choose from, and all of them are going to offer different coverage or pay for various portions of expenses. They are denoted by a letter of the alphabet, A through N. Some plans are more basic, like Plan A, while plan f is the most comprehensive of any of the medigap plans. The smaller plans, are going to be more affordable, and it's important that you choose a plan that's going to work best for you.
These Medigap plans are standardized by the government, which means that regardless of which company that you choose, the coverage is going to be identical. The only difference between companies is any additional benefits and the price of the premiums. If you want to save money, it's important that you compare dozens of companies before you decide which one is going to work best for you.
Medicare Supplemental Plan M
Now that you have a basic understanding of Medigap policies, let's look specifically at Plan M. Plan M is a more comprehensive policy, but there are still a few gaps that the plan doesn't cover. It's vital that you understand all of your options when you're shopping for supplemental protection. If you've done some other research, you'll notice that Plan M is almost identical to Plan D, minus a few exceptions.
Your Medigap Plan M will pay for two specific parts of Medicare Part A, the hospice care coinsurance payment or co-payments and the Part A hospital coinsurance and hospital costs for an extra 365 days after your traditional coverage have expired. Both of these coverage categories could result in massive bills depending on your situation.
For example, if you were to require an extended stay in a hospital, you could rack up a serious bill. If you didn't have Medigap coverage, you would be responsible for hospital fees worth thousands and thousands of dollars. The longer that you're in the hospital, the bigger that bill is going to be. Your supplemental coverage will ensure that you aren't stuck with a mountain of debt after you leave the hospital.
Medigap Plan M also coverage Part B copayment or coinsurance. Every time that you go to the doctor or get a service that is covered by Part B, you will still be required to pay a small copayment. In most cases, this is a relatively small expense, but if you're frequently going to the doctor or hospital, it can quickly add up. With a Medigap Plan M, all of all of those co-payments will be taken care of.
Additionally, you'll also have the first three pints of blood for any procedure paid for. If you ever have surgery or are involved in an incident in which you need blood, you won't have to pay for it yourself. It's important that you get all the protection that you may need, and pints of blood could be one of the dozens of expenses that you may run into.
One of the unique coverages of Plan M is that it will pay 50% of Part A deductible. With your traditional Medicare coverage, you'll have to meet the deductible before the program starts paying for anything. Once you've reached the threshold, then the coverage will kick in and they will start paying for their expense categories. With a Plan M, half of that deductible will be paid for you.
If you plan on doing a lot of overseas traveling in your retirement, then one coverage category that you should take note of is the foreign travel emergency coverage. With your Plan M coverage, you will have 80% of any foreign travel emergency coverage. You traditional Medicare plan is not going to pay for any of those bills, but without supplemental protection, those hospital bills can ruin your vacation.
While Plan M pays for a lot of the holes left behind, there are a few expenses that it doesn't cover, and the most notable one is Part B excess charges. Whenever you receive any medical services, there is a pre-determined amount that Medicare is going to pay. Legally, the doctor or hospital can charge 15% more than that set amount. Every dollar above that limit is considered excess charges, and with a Plan M, you would be responsible for paying for them out-of-pocket.
Picking the Best Plan for You
All of the ten plans are excellent options for supplemental coverage, but how are you supposed to decide which one is best for you? There are a couple of different factors that you should consider to ensure that you're getting the best health care protection for you.
The first thing that you should look at is your budget. Your supplemental coverage should give you the protection that you need to ensure that your finances aren't drained because of health care bills, but your plan shouldn't break your bank every month either. Before you apply for any Medigap plan, take a long and hard look at how much money you can spend on your supplemental insurance.
The next thing that you should consider is your health and family history. You can't predict the future, but you can make an educated guess. The purpose of your Medigap policy is to ensure that you get the health care services that you need without draining your savings account. If you're in excellent health and you have a spotless family history, then you can take the risk on purchasing a smaller policy that leaves more coverage gaps. On the other hand, if you have several red flags on your medical record, then you will need to consider purchasing a more encompassing plan that fills in all of the gaps.
Enrolling in a Medigap Plan M
Once you've decided which plan that you're going to buy, it's important that you understand everything about enrolling in these plans. First of all, purchasing one of these plans is very simple. It's just like purchasing any other type of plan. An experienced agent can walk you through the process and ensure that everything is handled correctly. What's more important is WHEN you enroll in your plan.
The best time to purchase one of these policies is during your Medigap Open Enrollment period. This is a six-month opportunity that begins the month that you turn 65. During this time, the insurance company can't decline your application, regardless of your health or any medical problems that you may have. If you're in very poor health, then this might be your only change to get supplemental coverage.
Additionally, during this time, the insurance company will not be able to increase your rates because of your health. Regardless of any condition that you have, you're going to get their lowest rates. Once you're outside of the open enrollment date, your application will have to go through all of the medical underwriting and hoops, and they could raise your premiums based on your health. If you want to save money, it's vital that you enroll during this time.
Questions or Concerns?
I know that shopping for Medigap coverage can be confusing. I hope this post gave you all of the information that you need to make an educated decision about your health care insurance. If you have any questions about supplemental insurance plans, feel free to check out my other posts or contact me. The older that we get, the more that we are going to spend on health care, but don't let those bills turn your retirement dream into a retirement nightmare.