How to know when an Insurance Supplement to Medicare is Appropriate
First off, anytime the term insurance supplement to Medicare is used what is being referred to is a Medigap policy. Medigap policies provide additional coverage towards health care costs that traditional Medicare does not cover. For example, basic Medicare covers hospital stays but the patient is responsible for the first $1,156 up to a sixty day stay. That fee effectively amounts to a deductible per hospital stay. For days 61-90 of hospitalization the patient pays $289 and for days 91-150 the patient pays $578. A long-term hospitalization can become expensive. Likewise, if a person must be placed in a skilled nursing facility under Medicare’s approval, there patient is not charged for the first twenty days. Afterwards, the patient will be responsible for the first $144.50 per day from days 21-100.
What an insurance supplement to Medicare or Medigap policy can do is to offset some or most of those costs. That can make the difference between financial hardships at a time when a person is their most vulnerable. However, purchasing a Medigap policy is not a foregone conclusion. The additional premium payments for Medigap policies are expensive especially for those people who are on fixed incomes. Thus, the question becomes how do I know when an insurance supplement to Medicare is right for me? The answer is not easy. Obviously, if a person were allowed to purchase a supplement only when they needed it the answer would be obvious. However, insurance companies will subject an applicant to underwriting before a policy is issued them to deny coverage for pre-existing conditions. Thus, a person should purchase their Medicare supplement when acceptance is guaranteed and that is during the six month open enrollment period when a person turns 65 and has applied for Medicare coverage.
A person must have a good understanding of their overall health and financial well-being in order to make the judgment call of whether the policy makes sense for them. The answer to that question will ultimately be one of balancing health concerns vs. estate planning and should be prepared for long before age 65 rolls around. Supplements can be purchased after the fact but acceptance is not guaranteed. See medicare.gov for more information on Medigap policies, premiums, and explanations of benefits.