If you’re approaching retirement or have recently become eligible for Medicare, you’re probably just now realizing exactly how confusing your coverage can be. You might find yourself sorting through different options, wondering if Medicare Part A and Part B—or “original Medicare”—will cover all your health care needs. You might be wondering if some kind of supplemental coverage is right for you or what additional coverage is available.
You probably already know it’s an important choice that can affect your health care spending far into the future. Some coverage options may lock you into larger out-of-pocket expenses than you’re prepared for, but there’s also no sense in paying expensive premiums on coverage you won’t need. To complicate it even further, you’re also under pressure to make the right decisions before your one-time supplement open enrollment period ends. It may be more expensive—or even impossible—to get the same supplemental plans later on.
If you’re here today because you’re unsure if you need additional coverage alongside Medicare, keep reading below. We’ll dig into the maze of Medicare and shed some light on when and why you might choose additional coverage.
The Biggest Gaps in Medicare Coverage
While original Medicare offers substantial coverage, it doesn’t cover everything. Let’s talk about some critical gaps that beneficiaries should be aware of before choosing their health care coverage.
Prescription Drugs
Original Medicare (Part A and Part B) does not cover most prescription drugs. You would need to enroll in a separate Medicare Part D plan or choose a Medicare supplement plan that includes prescription drug coverage.
Dental, Vision, and Hearing
Routine dental care, eye exams, glasses, and hearing aids are not covered under original Medicare. However, some supplemental plans offer limited coverage for these services.
Coinsurance and Deductibles
Medicare involves out-of-pocket costs, like deductibles and coinsurance, which can add up to quite a bit over time. Supplemental coverage helps reduce these expenses.
Foreign Travel
Medicare generally does not cover health care services outside of the United States. If you plan to travel abroad frequently, you may want to look into supplemental options that will cover you in those circumstances.
Key Benefits of Supplemental Medigap Plans
Many beneficiaries choose supplemental coverage or Medigap plans to fill the gaps in Medicare coverage. Private insurance companies offer these plans, and they’re designed to cover certain out-of-pocket expenses that original Medicare does not.
Here are some key benefits of Medigap plans:
- Enhanced cost coverage. Medigap plans can cover coinsurance, deductibles, and copayments, potentially reducing your health care costs. However, depending on your medical needs, you will want to carefully balance the benefit of increased coverage with the cost of paying supplemental premiums.
- Nationwide coverage. Medigap plans are generally accepted by any health care provider in the United States that accepts Medicare, giving you a wide range of options for medical care.
- Predictable expenses. With a Medigap plan, it’s easier to predict your health care expenses and budget for your health care needs.
What About Medicare Advantage as an Alternative?
In the past, instead of choosing a Medigap plan, beneficiaries could choose a Medicare Advantage (Part C) plan. These plans often included prescription drug coverage and additional perks like dental and vision care. While older Medicare Advantage may still cover some beneficiaries' plans, it is no longer an option for new enrollees as of January 1, 2020.
Make Informed Decisions About Your Health Care Coverage in Retirement
Deciding whether you need additional coverage alongside Medicare is a personal choice that depends on your individual health care needs and financial situation. Before making a decision, you should research and compare different plans and consider factors such as cost, coverage, and your preferred health care providers. Consulting with a licensed insurance agent or Medicare counselor can also provide valuable insights that help you make an informed choice.
Don’t spend your golden years worrying about the potentially devastating expenses that can come with unexpected medical care. At Leonard Financial Solutions, we can help you identify your health care priorities and develop a coverage strategy that fits your life and your needs.