Four Things You Need To Understand About Medicare Supplemental Insurance

Also known as Medigap, a Medicare supplemental insurance policy can be confusing. The following are four of the most important things you need to understand about this type of medical insurance in your retirement years.

You probably need this insurance

It is not uncommon for people approaching retirement years to misunderstand the coverage that Medicare provides. Many people are under the false assumption that Medicare will cover all of their bills. This is simply not true. What you will be responsible for depends upon many factors, but with Medicare Part B, you will be responsible for paying approximately 20 percent of the bill. It is for this reason that supplemental insurance policies are so important.

You should purchase your policy during the open enrollment period

When you enroll in Medicare Part A and Part B, you will be eligible to buy a supplemental policy. However, you need to purchase a policy during the open enrollment period. The reason for this is that insurance companies cannot turn you down for preexisting conditions. After this enrollment period, they can reject your application. Once you purchase a policy, it is guaranteed to be renewable. This is true even if you developed health problems that did not exist at the time you bought the first policy.

These policies are provided by the private sector

Because these policies are sold by the private sector, the premiums you pay go directly to the company you purchased the policy from. This is unlike Medicare Part B premiums that are paid directly to Medicare. In addition, because there are many insurance companies that sell these policies, there is competition on price, so you will need to get quotes on the policy you want from several companies to assure you are getting a good deal.

The policies are regulated by the federal government

The federal government defines these policies and assigns them letter designations. Currently, there are 10 plans available: A, B, C, D, F, G, K, L, M and N. Regardless of which company offers a particular plan, the policy will be the same for all insurance providers. Plan A is the most basic, and all other plans contain the basic coverage of Plan A, so begin with this plan, and decide if you need more coverage. Not all insurance companies offer every plan, but all of them are required to offer Plan A.

There are reasons a person might want to forego buying a supplemental policy. Some people can supplement Medicare with military or union coverage. Others may not have a large enough income to afford a policy and are able to use Medicaid as a supplement. For most people, however, it is a good decision to buy one of the 10 standard Medicare supplemental policies. Contact a company like Shifflett Insurance Services Ltd for more information.