If you are turning 65, or will qualify for Medicare some other way (such as you have been disabled for 24 months), you may be wondering, “If I get Medicare, why do I have to pay a premium for supplemental insurance?”
Although it may not appear so, the truth is, paying a premium for a Medicare Supplement is a good if not a great thing. You might even say, with supplemental insurance, Medicare is a golden ticket. Here is why:
All of the years you have been working, you (or your company) have had to pay immense amounts of money for your health insurance coverage. In addition to that, you probably had co-pays (like $20 when you see a doctor), co-insurance (like 80 / 20 plans, where the plan pays 80% and you pay 20%), deductibles (the amount you had to pay before the plan would pay anything).
When you qualify for Medicare your share of your health care costs practically plummets, especially if you get a Medicare Supplement Policy. Take a quick look at the way your costs will be broken down.
1. The Medicare Part B Premium
If you qualify for Medicare, Part A (which covers in-patient hospital expenses) is already paid for, by the taxes you paid as you were working. The only premium you have to pay is for Part B (out-patient expenses, such as doctors, specialists, lab work, etc.).
In 2010, your Part B premium will be $110.50 (if your income, filing jointly is less than $170,000. If your income was higher, you may have to pay slightly more). Normally, your Part B premium is taken directly out of your social security check. You don’t even miss it, because most likely, you will never even see it in the first place.
With Medicare Part A, you do have a deductible, and with Part B, you have a deductible, co-pays and co-insurance. 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 will see in a minute why I call 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 doesn’t matter if you are very healthy or extremely sick. If you are just now qualifying 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-called because it fills in the gaps left by Medicare), you can go to any doctor or hospital that accepts Medicare, anywhere in the U.S.A.
o Peace of Mind
With a Medicare Supplement Plan F (a very popular choice), all of the gaps left by Medicare will be covered. Almost without exception, the only costs you will have to pay are your Part B premiums, your Medicare Supplement premiums, and your Part D premiums (a low-cost separate drug plan that pays for your medications). That is all. Whether you get sick, or travel, or whatever happens, you can rest assured that your medical costs will be very, very predictable.
Honestly, with this combination, you have access to a very affordable and powerful health care system, with both freedom and peace of mind. Hopefully you can now see why I call it “the golden ticket.”
One more thing you should know. You can save even more money by shopping around (or better yet, by letting an expert brokerage shop around for you). You see, most Medicare Supplement plans are “standardized.” That means that the only difference between Plan F from “Company 1” and a Plan F from “Company 2” 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.