The Case Against Medicare Supplement Insurance
There are some people who believe that Medicare Supplement Insurance may be a waste of money. Here is why some people believe that to be true.
Original Medicare is a government-run health insurance program for people aged 65 and older and for people who receive social security disability benefits for at least 24 months.
Original Medicare, it has been argued, is the best insurance plan in the united states and among the best in the world. The premiums for Medicare Part A (hospitalization) are most likely paid for you (by the taxes you paid) and the Part B premium is only $110 per month for people newly getting Medicare in 2010.
Your share of costs for Original Medicare are also relatively low. If you go in the hospital for example, each stay in the hospital is only $1,100 total for up to 60 days. If you go to the doctor or have tests done (such as an MRI), you normally only pay 20% of the Medicare Approved amount (an amount much lower than the “regular” or “customary” amount charged by most health care providers).
In addition to low costs, you have tremendous freedom in your access to health care. You can travel anywhere in the country and find a doctor or hospital that will accept Medicare.
So the question is, if Medicare alone is such a great plan, then why in the world would anyone buy Medicare Supplement Insurance? A Medicare Supplement Plan is an insurance plan sold by a private insurance company. The purpose of these plans is to “fill in the gaps” left by Medicare. This is why these plans are often referred to as “Medigap Plans.”
Following are three reasons why “The Case Against Medicare Supplement Insurance” should be thrown out of court.
1. Guaranteed Insurability
When you first qualify for Medicare (such as when you turn 65), you are “guaranteed issue” of a Medicare Supplement Policy. In most situations, and in most states, you could be in the advanced stages of some dread disease and a Medicare Supplement company must sell you insurance at the preferred rate.
Also, once you do qualify for a Medicare Supplement Plan, you can never lose your coverage, as long as you pay your premiums.
2. Protection Against the “Big Stuff”
If you have to pay a few dollar here or there for an xray, or a co-pay at your doctor, that is probably no big deal. But if you get into trouble, meaning if you get really sick, the original Medicare protection may not be as robust as you thought. $1,100 per stay at the hospital can add up very quickly, as can your share of expensive diagnostic exams.
The fact is, most of us don’t buy insurance for the little things, such as a ding on the car. But we do want insurance for when the “just in case” happens, such as a major car accident.
Medicare Supplement Plans are very affordable for most people. As of this writing for example, a man turning 65 in Tarrant County, Texas can get a Medicare Supplement Plan F (a very popular plan) for a little more than $100 per month. A 70 year old female can get the same Plan F for about $130 per month.
Not only is that very affordable, but more importantly, it makes your health care costs very predictable. With a Plan F for example, your only healthcare costs (apart from prescription drugs) is the cost of your monthly Part B premium and your Medigap premium.
When you consider all of these factors, the case for Medicare Supplement Insurance is really much stronger than the case against it.