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Understanding Medicare Supplement Insurance
Once you hit your early 60s, you find your mailbox full of information about Medicare supplement plans available from private insurers. The sheer number of plans, and the differences among them, can be overwhelming. So how do you start to make sense of it all?
The best place is by understanding what Medicare does – and does not – cover. Medicare Part A basically covers the bill from the facility, whether that is a hospital, a skilled nursing facility, hospice, labs, etc. Part B covers the bill from the doctor or other provider, as well outpatient care and some preventive services, home health care and medical equipment.
The problem, though, is that Medicare Parts A and B don’t cover all those costs. And what they don’t cover can end up being substantial. For example, you might have a copayment or deductible for Part A. Part B covers only 80 percent of the provider costs; you must pay the remaining 80 percent. And that can add up to a lot of money.
Medicare supplement insurance supplements Medicare by paying some of the costs it does not cover. Medicare supplement insurance is not part of the Medicare program; you purchase it from private insurance companies. There are 10 different types of supplement plans, although not every plan is available in every state. And you must be enrolled in Medicare Parts A and B in order to get a supplement plan.
Your first step should be to see what plans – and what coverages – are available in your state. The range is very wide. Some plans pay virtually everything Medicare does not pay. Other plans require you to pay a copayment or meet a deductible before you have complete coverage. Some supplement plans can provide vision and dental coverage. Some have an out-of-pocket limit. You also can get a plan that includes prescription drug coverage, otherwise covered by Medicare Part D.
Next, look at your situation. As with any insurance, it helps to think about how much you could comfortably pay if you had to. In general, plans with higher deductibles, copayments and out-of-pocket limits have lower premiums.
Once you choose a supplement plan, you must keep it for a year. But you can change your plan every year if you find it does not meet you needs or might not be right going forward. For example, if you are expecting to have surgery, it might be a good idea to get a plan that costs more in premium but pays more in benefits.
Finally, a Medicare supplement policy covers only one person. If you and your spouse both need coverage, you will need separate policies.
If you would like to talk to someone about your choices, you can go to an insurance agent who handles health insurance and Medicare supplement plans. You also can find tools to help you understand traditional Medicare and find information about supplement plans at the Medicare website, Medicare.gov.