The Benefits of Medigap Insurance Plans for Individuals Using the Medicare System
Before getting into Medicare Supplement Plans, let us take a look how Original Medicare (Medicare Part A & Part B) normally works:
Medicare covers the following: inpatient care provided in skilled nursing facilities or hospitals. Home healthcare services, including non-medical assistance such as companionship, transportation, or assistance with bathing, dressing, or grooming. Out patient medical services, which include athletic or fitness services, doctor visits, and minor surgical procedures. Out patient care is not covered in the Medigap insurance plans.
Medicare Parts A and B are “fee for service” plans. They cover almost everything that happens in the hospital, doctor’s office, or nursing home. The government does not pay anything for hospital stays, prescription drugs, or doctor visits. Medicare benefits from “standardized” medigap plans are set by an agency called the Medicare Payment Information Center (MPIC). MPIC decides what Medigap insurance plans families should be covered by, based on their ages and incomes. (Medigap plans are standardized across the forty-eight states that participate in the program.)
Even though a policy holder can select the “most appropriate” plan, there are some things a policy holder should consider before choosing a plan. Many families do not realize that they can get additional coverage added to their policies at a lower premium. While it may seem like the coverage from medical insurance plans will be very high, the plans will have lower premiums if family members qualify for other types of discounts, or if they choose a higher deductible. In fact, it is common for premiums to be lower when family members receive additional coverage through rebates, as opposed to just receiving the same coverage from the basic plan.
Another benefit of adding a supplemental insurance policy to a basic plan is that if a family member falls ill and is hospitalized, the supplemental policy will cover the costs. Medicare part A and B are jointly enrolled in this plan. There are two exceptions to this, one being the emergency room deductibles, which are limited to three percent of the total out-of-pocket expenses. People who are purchasing supplemental health insurance plans in anticipation of a new baby, a new child, or a change in coverage should talk with their health insurance agents to see what types of options may be available to them.
Currently, there is no guarantee that the federal government will continue to fund the Medicare program after the start of the next fiscal year (2021). This means that there will likely be an increased focus on enrollment and plans and rates from both the government and private insurance companies. For those interested in purchasing a supplemental plan in anticipation of the addition of a new baby or other unforeseen medical expense, it would be wise to act quickly to get an insurance quote. With the high costs associated with illness during the upcoming holiday season, you want to make sure that your premiums do not exceed your out-of-pocket cash flow (OCF).