Do you really need Medigap (Medicare Supplement) Insurance? What is the worst-case financial exposure for those who rely solely on Medicare Part A and Part B? Many Californians are surprised to learn traditional or original Medicare does not have out of pocket limits. Yet, this type of protection is common with employer-sponsored insurance.
“Do Californians really need Medigap (Medicare Supplement) Insurance?”
Before looking closer at your potential financial out of pocket, let’s be clear on the terms we are using: Medigap (Medicare Supplement Insurance) is not Original Medicare; rather it is private insurance that supplements Original Medicare benefits, such as Part A and Part B. OK, let’s continue…
Assuming an average copayment of 20% for Part B expenses, you could face large financial liability, should you experience surgical work for Cancer, Cardiac, Hip, Knee etc. i.e. services that are not uncommon for individuals over 65.
“The short answer is yes, you do need Medigap (Medicare Supplement) insurance. “
Yet, your financial exposure could be far worse: The preceding paragraph made no mention of your copayment responsibility under Medicare Part A, should you experience hospitalization or skilled nursing services.
For example, Medicare grants each beneficiary a specified number of Hospital Days per lifetime.
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Hospital Days also have significant copayments (see example here), paid by you. A Medicare Supplement (Medigap) policy can add 365 additional days to the 60 day lifetime limit. In summary, Medigap is offered by private insurance companies to supplement the Original Medicare program. If you purchase it when turning 65, the cost is relatively inexpensive, sometimes costing less than what the government charges for Part B.
Never pay more than you have to for Medigap. It is wise to use an independent agent to research several plans at once, saving you time. Good to know: You pay the same monthly premium using an independent agent, as you would purchasing directly from the insurer. So why take a chance of paying more?
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