Who Needs Medicare Supplemental Plans?

Medicare supplemental plans (sometimes called Medigap plans) are intended to cover the gap between what Medicare pays and what you pay. However, they are restricted somewhat in their scope. Careful research may help you discern whether a Medicare supplement is right for you.

What does Medicare cover?

In order to know if you need a Medicare supplement, you first need a clear understanding of what Medicare will and won’t cover. There are several portions of Medicare. The most common are parts A and B. These are required to get a Medigap plan. Part A covers hospital stays. Part B covers doctor visits and outpatient care. You may also have Part D, which covers prescription medications. Under Medicare Part A, you can have up to 60 days of hospital stay in a year, for a single price of $1,184. That may sound like a lot of money, but remember, you just spent 60 days in the hospital. Part B covers 80% of doctors’ visits, X-Rays, blood work, MRIs, CT Scans, ER visits, and more. Medicare has a maximum they’ll approve, and the hospital isn’t allowed to charge you more than 20% of that amount. 

What does a Medicare supplemental plan cover?

The idea behind a Medicare supplement is that it covers the gap between what Medicare pays and what you pay. Whether this is a good idea for you depends on how wide that gap is. Of course, there are different plans, but they usually cover some or all of the 20% copay under Part B, and any extra hospital stay that Part A doesn’t cover. The question to ask yourself is whether you expect to spend more than two solid months in the hospital, or whether they miniscule costs that Medicare negotiates for you will accumulate and outweigh what you’re paying for insurance.

What does a Medicare supplemental plan not cover?

Medigap plans like to say that they cover “what Medicare doesn’t.” That’s true in the financial sense – they pay the deductible and the copay for Medicare-covered expenses. However, they don’t pay for things that are outside of Medicare’s scope. If Medicare doesn’t cover it, a supplement won’t cover it, either. Medicare supplements don’t pay for vision or dental. They also won’t pay for long-term care, glasses, or private nursing.

What are some alternatives?

Medicare Advantage Plans, a Medicare Prescription Drug Plan, or Medicaid could all help get the kind of coverage you want. If you still have employer, union, veteran, or tribal benefits, those might help, as well. Many of those plans offer wider coverage than a Medicare Supplement would.

What does this mean for me?

Medicare is a little narrow in scope, but it pays for a lot of treatment. Medicare supplements don’t broaden the scope – they don’t treat different kinds of things – they just give you deeper pockets on the things that Medicare already covers. If you go to the doctor twice a week or have tests run constantly, a supplement might help. But odds are you’ll want an alternate plan that broadens your coverage.

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