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If You Don’t Fill In Medicare’s Coverage Gaps, You Could Find Yourself Deep In The Hole

If you are a Coloradan approaching your 65th birthday and about to enroll in Medicare, you’ll quickly discover why having supplemental health insurance for Medicare is so important.

Contrary to what many people think, Medicare doesn’t pay for all your healthcare needs in your golden years. Far from it.

If you don’t purchase supplemental health insurance for Medicare, also known as Medigap insurance, you may be on the hook for substantial out-of-pocket expenses that can drain your savings and derail your retirement plans.

What Is Supplemental Health Insurance for Medicare?

Medicare will pay for a significant portion of your medical and health care costs, just like your private health insurance plan does. But just like you have out-of-pocket costs with your private insurance, you will also have to pay for many of the services you’ll need. As we age, we need more care. And unfortunately, long-term care, cancer treatments, and other therapies are costs not covered by Medicare – and those costs can be astronomical.

Medigap insurance refers to plans offered by a private insurance company to pay for those costs that Medicare doesn’t cover or provide benefits not offered by Medicare Parts A and B.

Filling in the “gaps” in Medicare and paying for services that would otherwise cost you tens, or even hundreds, of thousands of dollars, enrolling in supplemental health insurance for Medicare requires paying monthly premiums at a rate significantly less than the expenses these policies cover.

With a Medigap plan, you can choose or keep your physician and your preferred healthcare facility so long as they accept Medicare. Many Medigap plans are available, each of which varies in cost, scope of coverage, and area of availability.

Why Should You Explore Supplemental Health Insurance for Medicare?

To explore what Medigap insurance can do for you, imagine that you are standing at one end of the Royal Gorge Bridge, just outside Canon City. You can feel a certain amount of safety walking across this 1,260-foot suspension bridge because you know that bridge is stable due to the steel supports drilled deep within the canyon walls.

Now imagine, as you stand on the edge of where that bridge “should” be, there is only a hastily installed rope bridge. You can technically make it across that bridge alone, but would you feel the same sense of security stepping forward?

Likewise, a vast canyon exists between what Medicare pays for and what you may end up paying for even primary care. As you stand on the edge of turning 65, do you want the security of a Medigap plan that will get you safely to the other side of your medical bills? Or do you want to struggle with those costs on your own, knowing that one misstep could mean financial disaster?

You likely agree that the safety of investing in supplemental health insurance for Medicare is the clear choice.

Preferred CO - supplemental health insurance for Medicare

Related: Medicare 101: The Basics of Medicare Health Insurance in Six Minutes

What You May Have To Pay Without a Supplemental Health Insurance/Medigap Plan

A quick peek at the out-of-pocket expense for Medicare Parts A and B demonstrates what you stand to lose without supplemental health insurance for Medicare in place.

Medicare Part A Deductibles and Coinsurance Without Medigap Coverage

Medicare Part A covers inpatient hospital stays, stays in skilled nursing facilities, some home health care services, and hospice care.

In 2024, benefits for Medicare Part A inpatient hospital stays are subject to a deductible of $1,632. This deductible covers the participant’s financial responsibility for the initial 60 days of inpatient hospital care in any one benefit period.

However, from days 61-90, participants will be financially responsible for a coinsurance payment of $408 per day.

And if an extended stay in a skilled nursing facility is necessary, the daily coinsurance for days 21 through 100 in a benefit period is $204 in 2024.

Supplemental health insurance for Medicare in the form of Medigap plans significantly lowers these coinsurance and premium costs.

Medicare Part B Costs Without Medigap Insurance

Medicare Part B covers physician visits, preventative care services, outpatient treatment, and some home health visits. Unlike Medicare Part A, you must pay a premium for Part B coverage. This premium is based on income reported on your federal tax return, and for 2024, the minimum monthly premium is $174.70. The annual deductible for Medicare Part B is $240 in 2024.

Typically, you will also pay coinsurance of 20 percent for most Part B services after meeting your deductible, including:

  • Most physician services (including most doctor services during inpatient hospital stays)
  • Outpatient therapy
  • Outpatient mental health services
  • Durable medical equipment

Home health care or clinical laboratory services do not require a copay.

Notably, there is no coinsurance or deductible for annual wellness visits or preventive services the U.S. Preventive Services Task Force have rated as ‘A’ or ‘B’. These services include standard testing such as mammograms or prostate cancer screenings.

Get Help Understanding Medicare Options

If you find the above information confusing, you are not alone. Even the savviest, most intelligent Coloradans can find themselves at a loss to understand the intricacies of the Medicare system. Fortunately, help is available!

The independent health insurance brokers at Preferred Insurance have been helping their fellow Coloradans navigate the murky waters of Medicare for decades and are standing by to help you.

Call today to schedule your free consultation and put our insights and experience to work for you!