Clarifying what secondary Medicare Insurance is and how that relates to Medigap Insurance.
Some people may ask the question: Is secondary Medicare insurance the same as Medigap insurance? The answer really lies in understanding what the technical jargon is and then Medigap’s functional role becomes clearer. First off, there are various types of insurance that can serve as primary or secondary policies to Medicare. Workers retiring from large corporations often are able to retain company sponsored health care benefits at the same premiums as paid by current employees of that company under what’s known as “the rule of 72”. Company sponsored health care works in conjunction with Medicare as a secondary insurance. Military personnel may also have excellent health insurance coverage called TRICARE which also acts as secondary to Medicare insurance in the USA & territories and primary in all other locations globally (because traditional Medicare offers no coverage outside the USA). Medigap insurance works as a secondary to Medicare insurance. So in short, all Medigap policies function as secondary Medicare insurance but not all secondary insurance policies are Medigap.
Quite simply, traditional Medicare will provide its base coverage and determine portion of those medical expenses that remain unpaid. The secondary insurance then kicks in and applies its coverage to those remaining out of pocket expenses and what remains unpaid (if anything) is the responsibility of the insured. A well selected secondary insurance policy should result in affordable health care costs left to the insured.
Well, if you’ve earned insurance from a corporation or from military service, it should amount to a substantial savings in medical expenses throughout your retirement – a veritable fortune by many estimates. If you don’t have that option available and go with Medigap, you’re making an educated and calculated decision to incur an additional monthly premium that is known in order to limit the total medical expenses you anticipate incurring. Secondary Medicare insurance can be the difference between depleting your retirement assets or leaving a legacy to your loved ones.