Medicare supplemental insurance, also known as Medigap insurance, is a type of health insurance that is designed to supplement Original Medicare, which is the federally-administered health insurance program for individuals age 65 and older and certain disabled individuals. Medigap insurance is offered by private insurance companies and is designed to help cover out-of-pocket costs that are not covered by Original Medicare, such as deductibles, copayments, and coinsurance.
There are several reasons why an individual might need Medicare supplemental insurance:
- To cover out-of-pocket costs: Original Medicare has deductibles, copayments, and coinsurance for many medical services and treatments, and Medigap insurance can help cover these costs. For example, Original Medicare has a deductible of $203 for Part A (hospital insurance) and $445 for Part B (medical insurance) in 2021. Medigap insurance can help cover these deductibles and other out-of-pocket costs, such as copayments for doctor's visits and prescription medications.
- To provide additional coverage: Medigap insurance can provide additional coverage for services that are not covered by Original Medicare, such as medical care received while traveling outside of the United States. Original Medicare does not cover most medical care received outside of the United States, so Medigap insurance can be a useful option for individuals who frequently travel internationally or who live in areas near the border.
- To ensure access to necessary medical care: Medigap insurance can help ensure that an individual has access to necessary medical care, including preventive care and treatments for chronic conditions. Original Medicare has limits on certain types of medical care, such as physical therapy and skilled nursing care, and Medigap insurance can help cover these costs if they exceed the limits set by Original Medicare.
- To reduce financial risk: Medigap insurance can help reduce the financial risk of unexpected medical expenses and protect an individual's financial well-being. Medical expenses can be expensive, and Original Medicare may not cover all of the costs associated with certain medical treatments or services. Medigap insurance can help cover these costs and provide financial protection for the policyholder.
When selecting a Medicare supplemental insurance policy, it's important to carefully consider the individual's health needs and financial situation. It may also be helpful to consult with a health insurance broker or agent to determine the best policy for the individual's specific situation. There are several types of Medigap insurance policies available, and it's important to choose a policy that provides the coverage the individual needs. It's also important to keep in mind that Medigap insurance policies may not be available to individuals under age 65, and the premiums for these policies may vary based on the policyholder's age, location, and other factors.