Among many confusing health insurance terms, the “Medicare Supplement” is perhaps the one that is most misinterpreted by seniors and other Medicare recipients.  Here we look at the Good, the Bad and the Ugly relative to Medicare Supplements (aka Medigap).

Let start with a simple foundation:

Parts A & B together comprise foundational, necessary “Original Medicare” where almost everyone who is eligible opts in.

Let’s skip to Part D which is prescription coverage.  With limited exceptions, drugs are not covered through Parts A & B.  We recommend a Part D plan depending on your needs and plans may be switched annually.  Not opting in to Part D coverage will cost more down the road.  For those without pressing needs plans are very inexpensive.

This brings us to Part C, referred to as Medicare Advantage plans.  Let’s be clear.

Medicare Advantage is not the same as a Medicare Supplement.

This is a common confusion among seniors.   A Medicare Supplement also known as Medigap is designed to cover all or most of the costs not covered in Parts A & B.  The services in Parts A & B are delivered in Original Medicare and the Medicare Supplement bridges the “gap” in coverage.  So let’s get to it.

The Good

This is especially important and here’s why. 

A PCP or specialist may leave a Medicare Advantage network in the middle of a plan year leaving the beneficiary with a number of problems.  The same participant would have to cease taking Medicare patients as there are no networks in Medigap understanding that Medicare remains the primary insurer.

The only thing the insurance company can change is the premium.   Medicare Supplement premiums may go up or down and rate change histories are an important part of selecting or changing plans.

The Bad

As a result you may find that you are paying in advance for services anywhere from $1200 to well over $2000 annually in the form of premiums.  If you are in an area that is rich with quality health care options it would be wise to decide as you turn 65 whether Medicare Advantage would be more suitable.  This is especially true in the case where the beneficiary is not in need of important ongoing care.

The Ugly

Medicare Supplement or Medigap Insurance can be an excellent option once you know the Good, the Bad and the Ugly and have chosen a plan that is best suited to your unique health situation.  If you would like a free quote regarding your options click here.