5 Reasons Why You Should Consider Medigap

Our goal is to give you the tools and confidence you need to improve your health and finances. Although we may receive compensation from our partner insurance companies, whom we will always identify, all opinions are our own. CoverRight Inc. and CoverRight Insurance Services Inc. (NPN: 19724057) are collectively referred to here as "CoverRight".

Also known as ‘Medicare Supplement’ insurance, Medigap plans are a popular option, with around 15 million (or nearly 25%) of the 60 million Medicare beneficiaries purchasing a Medigap policy.

But Medigap may not be suitable for everyone. So, how do you know if Medigap is for you? Here are five reasons why I would recommend my clients get a Medigap plan.

Reason #1 – Freedom

Medicare supplement plans give you the freedom to choose. Medigap plans open up the possibility of seeing nearly 700,000 doctors around the country who accept Medicare.

With Medigap plans, you do not need to worry about ‘networks’, as long as the healthcare provider works with accepts Medicare, and the services you are getting are a ‘Medicare-covered service’, Medigap will help cover the costs.

If you want the flexibility to choose doctors and specialists without being inhibited by network and referrals, you should seriously consider Medigap. Plus, those with a Medigap policy do not need referrals before they are allowed to visit specialist doctors.

Of course, there are other ways to achieve this. But, by far and away, Medigap offers the most freedom out of all available options in the market.

Reason #3 – Controlled Cost

From its name, Medigap means filling the gap that Original Medicare does not cover. Original Medicare only covers 80 percent of Part B costs. You are responsible for the remaining 20 percent, like deductibles, copays, and coinsurance. Plus, under Original Medicare, there is no maximum cap on how much you need to pay in one year, unlike coverage under the Affordable Care Act (ACA).

Fortunately, Medigap is designed to help pay for these gaps in medical costs.

Although monthly premiums range between $50 all the way up to several hundreds of dollars ($300+), a lot of our clients still prefer Medigap. Why? Because they want a controlled and straightforward budget for their costs moving forward. By purchasing Medigap coverage, you shift the burden of out-of-pocket expenses to the insurance company in return for paying a monthly premium, meaning more predictable costs.

So, while it may cost a little bit more for the monthly Medigap premium, they receive the much-needed peace of mind and the assurance of comprehensive coverage.

Depending on where you live, there are up to ten Medigap plans, each with varying coverage levels. Two plans offer high deductible options – High Deductible Plan Medigap Plan F and High Deductible Medigap Plan G.

Medicare Supplement Plan F was a favorite because it covered all out-of-pocket costs. But Plan F is no longer available for newly eligible beneficiaries effective January 1, 2020. Medicare Supplement plan G is currently the best option – similar to plan F but does not cover Part B deductibles.

Medigap Plan N is another good choice. The only difference from Medigap Plan G is that it does not pay for Part B excess charges (doctors who don’t accept Medicare can charge up to 15% over the Medicare rate) and copayments of up to $20 when you visit the doctor’s office (or up to $50 for emergency room visits).

Reason #3 – Travel

Some of our clients are ‘snowbirds,’ who have multiple homes or simply visit their children for extended stays. If a client is frequently traveling for long stints, I would recommend Medigap as a cost-effective way to ensure you have good health coverage wherever you go.

In contrast to Medicare Advantage plans, there are no ‘networks’ when you have Medigap as you are still under Original Medicare. Note, however, that some Medicare Advantage plans will cover out-of-network services.

Some Medigap plans also have emergency medical benefits while traveling overseas.

Reason #4 – Cover for Emerging Health Costs

Sometimes, you can’t predict if a health concern will turn out expensive. But, there are situations when you can. Medigap insurance is excellent for people who already have some health conditions.

Here is how it works.

Usually, Medigap is allowed to reject people because of health conditions. Or, Medigap can charge them more for the risk of covering them.

Here’s the good news: If you sign up upon turning 65 or during that year, you have ‘guaranteed issue rights.’ These rights mean that by law, Medigap companies are not allowed to reject you.

That’s a great thing if you have a congenital condition or undergo many expensive annual procedures. With Medigap, you can get the best doctors by exploring these medical procedures in different states.

It’s important to note that this right begins the month you first sign up for Part B and lasts only six months (also known as your ‘Medicare Supplement Open Enrollment Period’). The window can’t be changed or repeated.

After these six months, there is a chance you may be denied coverage. If you’re able to buy one after these six months, it may cost more due to past or present health problems.

Therefore, if you want Medigap, the best time to enroll in Medigap is during this period.

#5 Reside in Rural Area with Limited Alternatives

Lastly, Medigap may be the only plausible option in their area. For instance, in some rural counties or communities far from metropolitan areas, there won’t be very good options available for Medicare Advantage.

In these cases, Medigap is simply the only option. And something is certainly better than nothing at all.

With the luxury, freedom, and direct costs of Medigap, this is an excellent fit for some of you. If you’re willing to pay ahead, Medigap plans can provide a sleek and simple solution to your retirement healthcare costs.