4 Factors to Consider With Supplemental Medicare Insurance


When planning for your future, purchasing a Supplemental Medicare Insurance is the way to go. Also known as Medigap, this form of insurance will help policyholders efficiently manage their finances by tackling on the “gaps” (out-of-pocket fees such as coinsurance charges, copayments, and deductibles) not covered by Original Medicare Plans (comprised of Part A and Part B).

As such, we’d like to help more people out on learning more about this useful retirement solution. Attaining the knowledge on the many details that this form of insurance covers is needed for one to get a plan that will best address his or her unique needs. We hope that the pointers we’re sharing today will help you get a good grasp on how to plan for your retirement. And eventually, by gaining a clearer perspective on how to approach the golden years, make you enroll in Medicare Supplement coverage.


1) The Wide Chasms Caused by the Gaps

For you to see the importance of Medicare Supplemental coverage, you must first know how damaging the gaps are. As revealed in a recent Commonwealth Fund report, a significant number of Medicare beneficiaries are struggling to manage their finances to pay for essential – yet costly – health coverage. More than 15 million Medicare beneficiaries (or one-fourth of the 56 million Medicare policyholders in the country) are spending approximately 20% of their household income on premiums and out-of-pocket health care support and services costs. Focusing just on the out-of-pocket expenses, the charges are estimated to amount to $3,024 per year.

Considering as well one’s financial standing, beneficiaries with incomes below 200% of the poverty level are at a high risk of making ends meet for health coverage. Notwithstanding individuals with chronic conditions and other functional limitations, the bar to sufficiently pay for essential health care is raised a notch higher. Also of note is the increasing rate of health care and other retirement costs in the country. As pointed out by the Centers of Medicare and Medicaid Services, national health spending is expected to grow at an average rate of 5.6% per year for 2016 to 2025.

Additionally, if one will refer to the Insured Retirement Institute’s study last year, almost half (45%) of the report’s baby boomer respondent’s stated that they have not been able to set aside any funds for the twilight years at all. As a result, only 24% of the respondents are confident that they have enough financial assets to last throughout retirement (which is even less than findings conducted five years ago, with 36% tallied for confident boomers).

Ironic it may seem, considering that Medicare beneficiaries take a big hit out of policies that should cover them both in financial and health matters. Yes, critical health care assistance is provided, but with the gaps in place, managing (and stretching) finances can all be a blur for a boomer.

What exactly are these gaps in Original Medicare? Here’s a summary of some expenses shouldered by beneficiaries:


Inpatient Hospital Coverage

  • Deductible on the first admission to a hospital in a benefit period
  • Daily coinsurance charges for days 61 through 90
  • Coverage charges after 90 days in any benefit period (unless a beneficiary has and uses lifetime reserve days)
  • Daily coinsurance charges for each lifetime reserve day used
  • Private hospital room and for a private duty nurse fees
  • Nonemergency care in a hospital not part of the Medicare program
  • Care received outside the United States and its territories, except under limited circumstance in Canada and Mexico

Psychiatric Hospital Coverage

  • Costs for care received after 190 days of specialized treatment in a psychiatric hospital during your lifetime
  • Gaps in general hospital coverage

Skilled-Nursing Facility Coverage

  • Daily coinsurance for days 21 through 100 in a benefit period
  • Costs for care after 100 days in a benefit period
  • Costs if a beneficiary wasn’t transferred to the Skilled-Nursing Facility in a timely manner (after a qualifying hospital stay)
  • Costs for care in a Skilled-Nursing Facility not approved by Medicare
  • Custodial care costs in a Medicare-approved Skilled-Nursing Facility
  • Costs for care in a general nursing home

Home Health Coverage

  • Costs for full-time nursing care
  • Costs for meals delivered to a beneficiary’s home
  • Costs for prescription drugs
  • Costs for Medicare-approved amount for durable medical equipment (20%)
  • Charges in excess of the Medicare-approved amount on unassigned claims (which are claims submitted for a service or supply by a provider who does not accept assignment)
  • Expenses for homemaker services that primarily assist a beneficiary in personal care or housekeeping needs

Hospice Coverage

  • Charges for inpatient respite care and outpatient drugs
  • Deductibles and coinsurance charges for usage of regular Medicare benefits on treatment of a condition other than terminal illness


  • Annual deductibles
  • Coinsurance and permissible charges in excess of Medicare-approved amount
  • Charges for most services unnecessary (or unreasonable) for the diagnosis or treatment of all illness or injury
  • Charges for most self-administered prescription drugs and immunizations

Given the statistics detailed above, it can then be concluded that these health care gaps are akin to financial chasms that can devour and swallow boomer financial savings. Without the proper health aid and financial assistance that can be provided by Medigap plans, going into the retirement phase of one’s life is like heading towards the night without even a single and comforting beam of a trusty flashlight.


2) Choosing a Medigap Plan

Identifying the said problems caused by the gaps will then now help you consider enrolling for Medicare Supplemental Insurance coverage. But the next question is, “which plan would work best?”

There are ten standardized Medigap plans to choose from. Labeled as Plan A – N (discontinued plans are E, H, I, and J), each policy has its own set of benefits that will cater to an individual’s unique needs or preferences. Medicare Supplement cost differs for each plan as well, with rates determined through:            


Policyholders, regardless of their age, are each charged the same monthly premium rate. Premiums will not increase as a beneficiary ages.


Premiums will be based on the age a beneficiary enrolls for Supplemental Medicare Insurance coverage. The younger an applicant is, the lower the premium may be.


Premiums will be based on the beneficiary’s current age. The younger an applicant is, the lower the premium may be.

Additionally, private insurance companies sell Medicare Supplements. This means that applicants gain the advantage to compare Medigap polices between insurance companies. The option to shop around the market for a plan also grants the convenience for an applicant to select an agent he or she is comfortable working with.


3) A Matter of Timing

Another important factor to consider when choosing a Medigap insurance is knowing when is the best time to get one. Aside from requesting Supplemental Medicare quotes (free Medicare Supplement Quotes can be searched conveniently online), seeking the best time to purchase will not only result to proper health and wealth security. It can also mean affordable premiums and, most importantly, a higher chance to be qualified for coverage.

As such, understanding how the Medigap open enrollment period (OEP) works will prove to be crucial in gaining coverage.

What is the Open Enrollment Period for Medicare Supplements?

  • The OEP begins when you turn 65 and lasts for six months. Buying a Medigap insurance plan during this period means that private insurance companies cannot use medical underwriting procedures when screening applicants. As such, this assures you of:
  • Private insurance companies cannot refuse to sell you any Supplemental Medicare Policies it offers
  • Private insurance companies cannot charge you a higher premium rate (as compared to someone older than 65 or an individual with health problems)
  • Private insurance companies cannot delay the start of Medicare Supplement coverage

Additionally, you can switch to another Medicare Supplemental Plan during this period. Medigap policies have a 30-day “free look” period. This allows applicants to review a policy, cancel if needed, and get a full refund in return.

Considering the OEP, boomers can invest in more time to learn and select a plan that will best suit their needs. By consulting with insurance agents (and even financial experts), applicants can make the most out of this period.


4) Request a Quote Now

As mentioned above, a free Medigap quote can be searched simply by doing a search online. Doing so will not only be the first step towards attaining the coverage that you deserve for the golden years – it may also open up more opportunities for you to learn more strategies to better prepare for your future.

Additionally, please consider comparing Medicare Supplement quotes. Take the time conversing with agents as well – you only want the best for your future, so make sure to maximize your opportunities.

We hope that the factors above will help you consider enrolling for Medicare Supplemental coverage. Do you have any questions to ask or suggestions to add? Please let us know below.

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