If you turn 65 or will qualify for Medicare in some other way (such as if you have been disabled for 24 months), you may wonder, “If I get Medicare, why do I have to pay a premium for supplemental insurance?”
Although it may not seem like it, the truth is that paying a premium for a Medicare supplement is a good thing, if not a great thing. You could even say that, with supplemental insurance, Medicare is a golden ticket. Here is why:
Every year that you’ve worked, you (or your business) have had to pay huge amounts of money for your health insurance coverage. On top of that, you probably had copays (like $ 20 when you visit a doctor), coinsurance (like 80/20 plans, where the plan pays 80% and you pay 20%), deductibles (the amount you had to pay before the plan will pay something).
When you qualify for Medicare, your share of health care costs practically plummets, especially if you get a Medicare supplement policy. Take a quick look at how your costs will be broken down.
1. The Medicare Part B premium
If you qualify for Medicare, Part A (which covers hospitalization costs) is already paid for the taxes you paid while you were working. The only premium you have to pay is Part B (outpatient expenses, such as doctors, specialists, laboratory tests, etc.).
In 2010, your Part B premium will be $ 110.50 (if your joint filing income is less than $ 170,000. If your income was higher, you may have to pay a little more). Typically, your Part B premium is deducted directly from your social security check. You don’t even miss it, because you will most likely never see it in the first place.
With Medicare Part A, you have a deductible, and with Part B, you have a deductible, copays, and coinsurance. But here comes the part where I mentioned the golden ticket.
2. Supplemental insurance closes the gaps left by Medicare
With a Medicare supplement plan, you get the following benefits (you’ll see in a minute why I’m calling it the golden ticket):
o Low premiums
Compared to regular health insurance, the premiums for a Medicare supplement policy are very affordable.
o Guaranteed insurability
It does not matter if you are very healthy or very sick. If you just now qualify for Medicare, a company that sells Medicare supplement insurance cannot deny you coverage because of your health or pre-existing conditions. The only exception to this is if you have kidney failure.
With a Medigap policy (so named because it fills in the gaps left by Medicare), you can go to any doctor or hospital that accepts Medicare, anywhere in the US.
o Peace of mind
With a Medicare F supplement plan (a very popular option), all the gaps left by Medicare will be covered. Almost without exception, the only costs you will have to pay are Part B premiums, Medicare supplement premiums, and Part D premiums (a separate low-cost drug plan that pays for your drugs). That’s all. Whether you get sick, travel or whatever happens, you can be sure that your medical costs will be very, very predictable.
Honestly, with this combination, you have access to a very affordable and powerful healthcare system, with freedom and peace of mind. Hopefully now you can see why I call it “the golden ticket.”
One more thing you should know. You can save even more money by shopping (or better yet, letting an expert broker shop for you). You see, most Medicare supplement plans are “standardized.” That means the only difference between “Company 1” Plan F and a “Company 2” Plan F is the price (the premium). You can find the best coverage at the lowest price and keep some of that “golden ticket” in your pocket.