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Medicare Supplemental Insurance Coverage

Medicare supplemental insurance coverage can make a significant difference to seniors looking for ways to save during retirement. Most seniors live on fixed incomes, making predictability an important factor to their finances. Medicare supplemental insurance coverage gives you a consistent monthly premium while taking care of major medical expenses, including supplemental dental coverage, so you have no surprises or dramatic fluctuations in your income. This consistency can help you better plan your finances with the peace of mind that your health is covered and your savings is safe. Depending on your current and future health needs, your age, your budget, and many other factors, you have several options for Medicare supplemental insurance coverage.

Benefits of Supplemental Insurance

Aside from the peace of mind that comes with predictability, Medicare supplemental insurance coverage offers many practical financial benefits. Your regular Medicare plan offers many services, but alone it can only cover 80 percent of a Medicare-approved cost. You must pay the remaining 20 percent coinsurance on your own unless you have a form of supplemental coverage. Medicare supplements, also called Medigap policies, cover this coinsurance so you don't need to dip into your savings. All Medigap plans cover your coinsurance as well as your first three pints of blood in a year before Medicare takes over. These are called "core benefits" and are encompassed in Medigap Plan A.

Seniors can choose from 10 total supplemental insurance plans labeled Plan A through Plan N, each offering different benefits. Medicare supplemental insurance plans are standardized, so every provider must offer the same coverage within a specific plan. The most detailed coverage is offered through Plan F, which includes coinsurance and blood work, deductible coverage, foreign travel emergency insurance, skilled nursing faculty and hospice care. Plan F also covers excess charges that can result when the real cost of services is greater than the Medicare-approved amount. Seniors who want comprehensive Medicare supplemental insurance coverage without high monthly premiums can opt for high-deductible policies that offer benefits after an annual deductible has been met.

The plan with the best benefits for you will depend on your financial situation and your health needs. Although you might think a basic plan with a less expensive premium is more desirable if you have a smaller budget, this isn't always the case. Weighing your monthly premium against the costs of unexpected health expenses can help you decide, paradoxically, if you can afford basic insurance. If the idea of facing a large deductible or other out-of-pocket health expenses makes your stomach sink, you probably need more comprehensive supplemental coverage. Thoroughly researching supplemental insurance carriers and plans allows you to consider all your options before choosing a policy.

Enrolling in Medigap

Before you decide to purchase a Medicare supplemental insurance coverage, you should be aware of a few key date ranges that can determine not only the plans you can choose, but the rates that you pay. The first important date range is your Open Enrollment period, which extends for six months after you enroll in Medicare. During Open Enrollment, you can purchase any supplement Medicare policy without having to take a physical or go through medical underwriting. Your provider also cannot charge you higher rates because of any preexisting conditions. The second important date range is your Guaranteed Issue period, which can determine when you are able to seamlessly switch your plan or your provider. Researching your state's laws regarding Medicare supplemental insurance coverage can help you determine how these dates apply to you.

Another important factor to consider when researching Medigap companies is the age-rate policy. Companies don't always base premiums on your age. Some providers charge everyone with a particular plan the same rate. This type of pricing is known as the community-rated method. Other companies determine your rate by the age you are when you enroll in your policy. As long as you keep your policy, your rate stays the same. This is called the entry-age-rated method. Companies that determine rates by the carriers' age, raising them slightly each year, use the attained-age-rated method. The best method for you will depend on your age and how confident you are that you will keep your chosen policy.

The provider you choose is one of the most important decisions you will make regarding your Medicare supplemental insurance coverage. Since providers can choose the plans they want to offer, researching local companies can help you determine which ones have the plans you most desire. A careful self-assessment of your lifestyle, current health issues, family history and savings can help you determine the coverage you need and the monthly premium price range you can afford. Researching various plans well before you need to purchase Medicare supplemental insurance coverage can help you determine the best Medigap provider for you.


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