Medicare supplement insurance will unequivocally make Medicare coverage less expensive. This policy is commonly referred to as “Medigap” insurance. It is purchased from a private insurer that must comply with governmental standards and regulations. Simply stated, Medigap insurance essentially fills in the “gaps” in Medicare coverage. Medigap insurance essentially pays the associated Medicare expenses that can translate into consequential negative financial implications. The expenses are critical for seniors and disabled on a limited, fixed, or inelastic monthly income. Over time, the incidentals can become a serious financial consideration, especially when the insured requires frequent physician visits or recurrent hospitalizations. Medicare supplement insurance provides a measure of security and peace of mind, as the only associated expenses are the insurance premiums.
Medigap policies pay the annual Medicare deductible ($135), which is the amount that must be paid out-of-pocket before Medicare policy benefits are initialized. Additionally, these supplemental policies must pay the hospitalization co-pay of $1,068 (first 60 days), $267 (61-90) and $534 (91-150th day. The policy is required to pay the residential skilled nursing co-pay of 133.50 per day (day 21-100). Moreover, the policy must provide full or partial coverage of the additional 20% charged by physicians and provide an additional 365 days of hospitalization. Furthermore, the Medigap policy is required to provide full or partial coverage of the price of the first 3 pints of blood received annually.
Supplemental Medicare insurance policies or Medigap policies can create substantial savings for the policyholder over the life of the policy. For example, if the insured were admitted to the hospital five times during the year, the out of pocket costs would be $5,340. With the Medigap policy there would not be a related cost. On the other hand, if the insured was reasonable healthy and went to the doctor once monthly there would be an appreciable savings. If the physician’s visit were $185, the policy would save the insured over $600. The savings would offset the cost of the policy.
In addition, the Medigap policy would provide indemnification against future costs in the event of a consequential illness, accident, or injury. The only expense that would be incurred from either incident would be the cost of the insurance coverage. Therefore, during the enrollment period, an investment in a Medigap policy with a reputable insurer is a sagacious, judicious, and prudent investment.