Do I Need Both Medicare and Private Insurance?

Deciding on Medicare Private Insurance: Supplemental Gap Insurance Or Parallel Protection Insurance Plans?”

In determining the need for a Medicare private insurance plan to supplement Medicare, there are two distinctly different situations to consider. The first case is whether the insurance in question is a traditional employer plan, retirement otherwise, that you have when you become eligible for Medicare. The second of the two possibilities is whether it is necessary to supplement Medicare with “Medigap” insurance?

The Parallel Insurance Concept

When the first option is the case, the type of insurance that covers the individual will determine what is covered and not covered. In the Social Security Administration Medicare Handbook, the government recommends working with the private insurance provider to determine how their policy works with Medicare. For their part, Medicare provides information in their Medicare and Other Health Benefits: Your Guide to Who Pays First booklet, on who pays what when private insurance and Medicare are in effect simultaneously.

Supplemental Protection In The Gap

Determining whether a Medicare private insurance plan for gap coverage is necessary to supplement Medicare is much less complex. The gaps in the Medicare Plans – A, B, C and D – are pretty much the same for all participants. Plan D, for example, covers prescription drugs to reduce the cost burden for the senior. However, Plan D only covers up to $2,930 of the total Medicare and participant cost together. If the insured has additional need for prescribed medication, they must pay the additional as an out of pocket expense until the combined total is $4,700. The amount of $4,700 triggers the “catastrophic” cost of medication provision. The $1,700 difference between the two amounts is the gap. The issue now is whether the $1,700 gap will result in a financial hardship for the insured. If that were the case, purchasing a Medicare private insurance plan to supplement Medicare would be the prudent choice.

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