Buying Supplemental Insurance – Choosing a Medigap Policy
Retirement is a special milestone, but you need to be prepared for the journey ahead. Unfortunately, Medicare won’t cover all your healthcare costs during retirement. Instead, consider purchasing Medigap, a supplemental medical insurance policy offered by private insurance companies. Designed to cover costs that aren’t paid by traditional Medicare, choosing a personalized Medigap policy is very important.
When’s the Best Time to Buy a Medigap policy?
It’s best to purchase a Medigap policy by the time you turn 65. During a period of open enrollment, you can’t be turned down or charged for being in poor health. For people 65 years or older or enrolled in Medicare part B, open enrollment begins on the first day of the month.
Choosing a Medigap policy is important due to the inability to purchase the policy you desire outside of open enrollment. Once it’s already purchased, a Medigap policy is guaranteed renewable, and the insurance policy can’t cancel the policy if the premium is paid.
What’s Covered in a Medigap Policy?
For most states, eight standardized plans can be offered as Medigap. It’s best to analyze each option and find the plan that works best for you. New Medicare buyers have a choice between plans A, B, D, G, K, L, M, and N. Each plan includes different benefits that can include the following:
● Medicare coinsurance amounts
● Medicare part A deductibles
● Nursing facility care coinsurance
● Foreign travel emergency costs
Are all Medigap Policies Created Equal?
Since most Medigap policies are sold through private insurance companies, they’re regulated by federal and state law. Thus, any plan you choose will be about the same as the policies offered in another state.
With that said, it’s all about choice and preference. The quality of each company may differ on customer service, financial security, and reputation. The price of Medigap plans can vary from company to company, which needs to be considered when staying within a budget.
Does Everyone Need One?
No, and it’s illegal for an insurance company to force you into a Medigap policy. If you fall under the following categories, a Medigap policy will not be required:
● You have joined a Medicare Advantage plan or a private fee-for-service plan
● You work past the age of 65 and have employer-sponsored health insurance
● You’re covered by a post-retirement, employer-sponsored health plan
Please contact me if you need guidance and help understanding Medicare options and policies, like Medigap; I have helped many people work through the Medicare onboarding process as a licensed Medicare insurance agent. I’m also a full-time family financial planner working in the Greater Boston Area. After years of working with clients of all age groups, the one common denominator I always hear is they wish they had sought advice sooner. Don’t be afraid to ask for help.
