Why Consider Medicare Supplement Insurance in Your Retirement Budget
While retirement budgets may be stretched thin, there are certain types of insurance that are worth considering. One of these is Medicare Supplement insurance. Medicare Supplement insurance, commonly known as Medigap insurance, helps to cover some of the medical costs that are not covered by Medicare, and is available to anyone enrolled in Medicare Part A and B.
If you’re closely watching your retirement budget, you’ll want to take note. Medicare does not always pay for all of your doctor or hospital bills. Some of the services that original Medicare doesn’t cover include:
- Most prescription drugs and medicines taken at home
- Long-term care in a nursing home
- Routine physical exams (except for a one-time preventive care exam), eye exams, glasses, hearing aids, dental care and most dental services, and foot care and orthopedic shoes (except for diabetics).
- Non-medically necessary or reasonable services and products
- Services or items provided by a government program or workers’ compensation
- Services provided by a relative or household member
- Services provided outside the U.S. (with some exceptions)
- Most chiropractic services
- Custodial care
- Cosmetic surgery, except after an accident
- Acupuncture
- Most vaccinations
- The first three pints of blood for transfusions (each year)
- Delivered meals to your home
- Private nurses
- Extra charges for a private hospital room unless medically necessary
- Homemaker services, except under hospice
How Medicare Supplemental Insurance Can Stretch Your Retirement Savings
If you have an injury or illness, you may require many items that original Medicare does not cover. If you have retirement savings or other financial resources, you have the option to pay for those things out of pocket.
However, most people like to make the most of the money they have set aside for retirement and their family, and choose not spend more than they need to on medical care.
That’s where Medicare Supplement insurance comes in.
Here’s an example of how it works:
- You go to see the doctor and it costs $250 for the visit.
- The physician’s office sends the bill to Medicare.
- Instead of $250, Medicare says the approved charge is $200.
- Medicare pays the doctor 80% of the approved charge, or $160.
- You must pay the remaining $40, unless you have Medicare Supplement insurance which will pay the $40.
The rules and regulations surrounding Medicare can be somewhat difficult to navigate. For example, if you’ve enrolled in a Medicare Advantage plan, and you have a Medicare Supplement policy, then the Medicare Supplement policy will not pay any deductibles, copayments or other cost-sharing requirements.
The good news is that Medicare Supplement insurance plans are standardized and all insurance companies offer the same basic Medicare Supplement coverage. However, please note that in Massachusetts, Minnesota and Wisconsin, Medicare Supplement policies are standardized in a different way. This is why it’s important to compare Medicare Supplement policy premiums with a wide range of carriers.
Everyone wants to make the most of their retirement savings while insuring their current and future health. A Medicare Supplement policy may be the right choice for you.
