Medigap Policies Can Be A Smart Purchase

Monday, June 1, 2009

Being on Medicare is great, right?  Well, yes and no.  Being on Medicare is great because the monthly premiums can be affordable.  Many people get Part A automatically when they turn 65.  They do not have to pay a monthly payment called a premium for Part A because they or a spouse paid Medicare taxes while they were working.  The Part B premium may be low compared to what an individual health insurance policy would cost for someone that age and there are no exclusion for pre-existing conditions with Medicare.

Being on Medicare may not be so great when you consider that Medicare Part A has a 2011 deductible of $1,132 and Medicare Part B has a $162 deductible in 2011, then generally pays 80% of the Medicare approved expenses. This is where Medigap insurance (Medicare supplement coverage) comes in and can be so beneficial.  A senior can purchase a Medigap policy, like a Plan F, that covers the Medicare Parts A and B deductibles as well as covering generally the 20% of Medicare Part B expenses.

If you are buying a Medigap policy, hoping to get your money's worth out of it be careful what you wish for. That means you are hoping to have poor enough health to get the insurance company to pay as much or more for your health expenses as you paid in premium.  That does not makes sense.  Do you want your money's worth for auto or homeowner's insurance?  Probably not.  Of all insurance, the one you least want to use is probably your health insurance.  Medigap insurance is bought to help protect you from the big expenses and has been a great purchase for many seniors because it has helped provided peace of mind and financial protection when big needs have unexpectedly and unfortunately arisen.