Should I Sign Up for a Medigap Plan?

Most seniors who become eligible for Medicare at the age of 65 choose Original Medicare for at least their first year of coverage. If you are covered by Original Medicare, you may be wondering if you really need a Medicare Supplement Insurance Policy (also called Medigap) and if it’s worth the cost. We talk to hundreds of kupuna every year who want to know if they should get a Medigap Plan. We hope you will find the information in this article helpful.


Is a Medigap Plan Worth It If I Choose Original Medicare?


Medicare insurance comes as a welcome benefit to the vast majority of seniors but it doesn’t cover all your healthcare expenses or all the services you may need. Seniors on Original Medicare only who end up with long-term hospitalization or other substantial medical treatment often end up struggling to pay their share of the cost.


What is Medigap?


Medigap is a type of supplemental insurance. Medigap plans are designed to pay for some or all of the out-of-pocket costs that Medicare doesn’t cover such as co-insurance and co-pays. Essentially, these plans were created to supplement Medicare coverage and depending on the plan, can work in two ways. 1. Provide more financial coverage for the services that Original Medicare covers. 2. Provide financial coverage for services that Original Medicare does not cover such as vision, dental or long-term care.


Private insurers offer a range of Medigap Plans to meet different needs and budgets, though lettered plans from each company are required to have the same benefits. Contact a Medicare agent near you who can go over all your supplemental insurance options.


What is the purpose of a Medigap Plan?


The purpose of a Medigap Plan is to get money back for the costs you pay for health services out of your own pocket.


What does Medigap cost?


The monthly premium for Medigap Plans varies from plan to plan (and can vary from insurer to insurer). But the general rule of health insurance plans applies to Medigap insurance: you will pay more for more coverage and less expensive plans come with a higher deductible.


Why should I buy a Medigap Plan?


Seniors who want to avoid out-of-pocket expenses from unexpected or known medical needs may be interested in buying a Medigap Plan. Even most routine services come with copayments and deductibles, and these costs can add up. Original Medicare does not come with an annual out-of-pocket maximum so an unexpected long-term illness can cause a huge financial set back.


Note: Medigap Plans sold after 2016 are not allowed to include prescription drug coverage. If you are looking to add prescription drug coverage to Original Medicare, you can join a Medicare Prescription Drug Plan (Part D) or Medicare Advantage Plan.


Some expenses that Medigap Plans can help you meet:

  • The 20% fee you may owe for hospital services outside of basic bed and board.

  • The daily cost of a stay in a hospital, nursing facility or hospice after 60 days.

  • The 20% fee you may owe for most doctor services.

  • Medicare deductible

Medigap vs. Medicare Advantage Plans


Seniors who choose to receive their Medicare insurance through a Medicare Advantage (MA) Plan do not need a Medigap Plan. In fact, you cannot have a Medigap Plan and a MA Plan. Most Medicare Advantage Plans replace all the services included with Original Medicare and add in extra services such as dental, vision, prescription drug coverage and preventative healthcare within a pre-selected network of doctors and hospitals.


Seniors who travel a lot may prefer a Medigap Plan over a Medicare Advantage Plan because they offer more flexibility in where and who can provide care.


Contact a PBC Agent for Help


Our independent insurance agents are dedicated to assisting people on Medicare and those who are ready to transition from employer coverage to personal retirement coverage. We help kupuna understand their benefits options and apply for additional coverage, as needed. Because we represent all the major Medicare Advantage and supplement plans in Hawaii, we are able to offer unbiased advice; all at no cost to our clients.


At PBC, our clients are our number one priority and we look forward to getting to know you and your needs. Call us today at (808) 738-4500 to see how we may be of assistance.