Have peace of mind. Learn about your health insurance options today.

Why Do I Need Medigap Insurance?

The chasm of what Medicare will and will not cover can seem as vast as the Grand Canyon. Read how Medigap Insurance can help your retirement dollar go...
Monday, 23 August 2021
Why Do You Need Medigap Insurance? Why Do You Need Medigap Insurance?

The chasm of what Medicare will and will not cover can seem as vast as the Grand Canyon. Read how Medigap Insurance can help your retirement dollar go farther.

Instead of Spending Your Retirement Savings On Healthcare Costs, Spend Some Time Learning About Medigap Insurance 

If you’re approaching your 65th birthday and are researching how Medicare works, you’ll soon hear about Medigap insurance. That’s because without Medigap insurance, also called Medicare supplemental insurance, your golden years could be tarnished by unexpected and substantial medical expenses that Medicare does not cover. 

Despite what many people think, Medicare is not free health care for the rest of your life. While the program does pay a substantial portion of your medical and health care costs, Medicare does not pay for everything, much like your private health insurance. And as you will likely need more care as you get older, including things like long-term care, cancer treatments, or other expensive procedures, the costs not covered by Medicare can seem as vast and deep as Arizona’s beloved Grand Canyon.

If Medicare is part of your near future, here is what you need to know about Medigap insurance and why you should meet with an experienced Medicare health insurance broker to explore your coverage options.

What Is Medigap Insurance?

The term “Medigap insurance” refers to plans issued by private insurance companies to either pay for the costs Medicare doesn’t cover or provide benefits not offered by Medicare Parts A and B.

Medigap insurance covers the “gaps” in Medicare and pays for care that could otherwise cost tens of thousands of dollars over time. While such insurance policies require the payment of monthly premiums, the monthly costs are significantly less than the expenses the policies cover. There are many Medigap plans varying in cost, level of coverage, and area of availability.

Additionally, Medigap plans allow you to choose or keep your doctor, so as long as the physician or clinic you choose accepts Medicare insurance. 

Related Reading: 7 Questions To Ask Before Selecting A Medicare Plan

What You May Have To Pay Without Medigap Insurance Coverage

Calling the expenses not covered by Medicare “gaps” dramatically understates the amount of money you may need to pay for your care. They are more like chasms. A quick look at out-of-pocket costs for Medicare Parts A and B illustrates how much of a hit your retirement account could take without Medigap coverage.

Medicare Part A Premiums

Medicare Part A covers inpatient hospital stays, skilled nursing facility stays, some home health visits, and hospice care. While some participants may have a premium for Part A coverage, 99 percent of Part A enrollees do not have to pay a premium since they have at least 40 quarters of Medicare-covered employment. If you paid less than 30 quarters of Medicare taxes, however, the standard Part A premium you will pay in 2021 is $471. If you paid 30-39 quarters of Medicare taxes, your standard Part A premium is $259.

Medicare Part A Deductibles and Coinsurance For Hospital Stays Without Medigap Insurance

For each benefit period in 2021, you’ll need to pay a deductible of $1,484 for Medicare Part A’s inpatient hospital benefits (including for inpatient mental health stays). This deductible covers your share of costs for the first 60 days of inpatient hospital treatment in a benefit period. 

How much coinsurance you will pay for an inpatient hospital stay largely depends on the length of your stay:

  • First 60 Days: $0 coinsurance for each benefit period
  • Days 61-90: $371 coinsurance for each day of the benefit period
  • 91 Days or More: $742 coinsurance per each "lifetime reserve day" after day 90 for each benefit period (up to a total of 60 days over your lifetime)
  • Beyond lifetime reserve days: all costs

Medicare Part B Costs Without Medigap Insurance

Medicare Part B covers physician’s visits, outpatient care, preventive care services, and some home healthcare visits. 

In 2021, the standard Part B premium for individuals who made $88,000 or less in 2019 and married couples who filed jointly and made $176,000 or less that year is $148.50 per month. The premium gets higher for individuals with higher incomes. For example, those who earned more than $500,000 in 2019 and jointly-filing couples who earned $750,000 or more in that year will pay $504.90 in monthly premiums for 2021. 

The Part B deductible for 2021 is $203. After meeting your annual deductible, typical copays are 20 percent of the Medicare-approved amount for:

  • Most physician services (including most doctor services during inpatient hospital stays)
  • Outpatient therapy
  • Outpatient mental health services
  • Durable medical equipment

Home health care or clinical laboratory services do not require a copay.

If You Need Medigap Insurance (And You Do), We Can Help

Figuring out Medicare coverage and costs is anything but easy. Unless you want to spend a lot of your retirement savings on healthcare, you will want to add the additional coverage Medigap Insurance provides. For the past 30 years, the experienced, independent insurance brokers at Southwest Health Insurance Experts have been helping our friends and neighbors in Arizona select the insurance plans that best suit their needs, including small business and group plans, individual policies and Medicare. We can help you with all of your Medicare needs, from Medigap insurance plan selection to enrollment to education and more.  

Contact Southwest Health Insurance Experts today to schedule a free consultation to discuss your Medigap insurance questions and needs. 

Also From Our Medicare Information Blog:

Which Medicare Supplement Plans Are Best In Scottsdale, Arizona?

When I’m 64: How Should I Be Preparing For Medicare?

Read 1305 times

What our Clients Say

Thanks so much for getting my health plan done for me.  It was a real surprise after being turned down twice, to finally get approved.  And what a relief!  Thanks again! - D. D. (Tucson)