Are Medicare Supplement Plans Worth It?

It can be a huge and costly mistake if you only rely on Original Medicare without any backup coverage. News Flash: Original Medicare does not cover all of your healthcare costs which can leave you with unexpected and costly healthcare bills.

Basic Medicare will only cover 80% of your Medicare approved medical bills. You’re responsible for the remaining 20% — which can be HUGE! It only takes is 1 significant hospital visit and you can be on the hook for thousands of dollars.

Is supplemental Medicare insurance worth it? Yes, and we’ll break down how a Medigap plan can protect you from huge medical bills.

Why do I need a supplement to Medicare? Are Medicare Supplement Plans worth it?

You have a lot to figure out when you begin your Medicare journey. When you’re turning 65, the first thing you need to figure out is if you should enroll in a Medicare Supplement plan or not. Are Medicare Supplement plans worth it? You’ve probably been asking this question. Let’s find out.

What is a Medicare Supplement?

Many people want to supplement Original Medicare coverage with a private insurance plan that fills in the various gaps that have been left over by Medicare’s basic coverage. These supplement plans are also known as sometimes known as Medigap plans and are designated by plan letters. These plans are not part of Original Medicare.

For example, Medigap Plan F pays 100% of out-of-pocket costs by paying a monthly Premium. The benefits of a Plan F are the same no matter what company you choose. The same goes for Plan G or any other plan letter. In other words, Medigap plans are standardized. However, the cost of a plan will be different from company to company. States regulate Medicare Supplement companies to make sure they maintain these coverage levels. Learn more about two of the most popular plans: Medicare Plan N vs Plan G.

why do i need a supplement to medicare?

When you enroll in Medicare, you’ll have Part A (your hospital coverage) and Part B (your outpatient care). Parts A and B cover around 80% of your medical costs and you’re responsible for 20%.

You have 2 options to help protect you from the unexpected costs of Original Medicare:

Medicare Supplement Insurance Plans
Medicare Advantage Plans

Your Out of pocket costs with Original Medicare will vary significantly based on your health. A Kaiser Family Foundation study found that an average Medicare beneficiary that is in poor health would pay approximately 2 1/2 times the out-of-pocket costs of beneficiaries that were in excellent health.

Now it is impossible to know the future and when our health can change from healthy to sick. This unpredictability is exactly why a Medicare Supplement is useful. A Medigap plan has predictable premium costs that will cover your unpredictable health care costs.

Is Medicare Supplemental insurance necessary? Yes!

medicare without supplemental insurance

Medicare Part A is free for most people and it comes with a $1,364 Deductible for each Benefit period. Medicare Part B comes with a low annual deductible, however you will pay approximately 20% of the remainder for most physician services.

IMPORTANT: That Part B 20% includes time when you’re a hospital inpatient. It doesn’t stop there. You’re responsible for the 20% for outpatient therapy as well as Durable medical equipment. These are things like wheelchairs or walkers.

Your 20% comes after your deductible. There is no limit to how much you’re responsible for paying out.

What if you have a sudden heart attack & require multiple heart surgeries and visits to your hospital? You may be setting yourself up for medical bankruptcy.

Medical procedures, rehab, medications, hospital visits… it all can quickly add up to huge medical bills. These bills can be avoided with an affordable Medicare Supplement plan.

is supplemental medicare insurance a waste of money?

Is Medicare supplemental insurance worth it or is it a waste of money? The choice to purchase a Medicare Supplement plan will be determined by your risk tolerance. In other words — Do you want predictable or unpredictable health care costs?

Are you the type of person who wants peace of mind with predictable health care costs by paying a monthly Medigap premium?
Or do you want to skip getting a Medigap plan and hope to save money on monthly premiums — but stress out about when you may have an unexpected illness or injury that can cost you thousands of dollars?

Is Medigap insurance worth it? Do I really need supplemental insurance with Medicare? Yes, if you want peace of mind.

Should you Buy a Medicare Supplement plan?

What do you think? Is supplemental Medicare insurance worth it? It definitely is. If you can afford a Medicare Supplement policy you should shop to see which plan can meet your budget and coverage needs. If you can’t afford a Medigap policy, then you should consider a Medicare Advantage plan. There are some disadvantages of MAPD plans, but they’re better than no coverage. Below are some Pros and Cons to both types of plans.

Medigap Pros and Cons

A Medigap plan is health insurance designed to fill the “gaps” of Medicare covered services not paid by Original Medicare. Medigap is also called Medicare Supplement insurance.

The Pros to having a Medigap Plan:

Your choice of Medicare doctors anywhere in the USA!
Your choice of Medicare hospitals anywhere in the USA!
No networks
No referrals needed. You have control over your healthcare!
Comprehensive Medical Coverage
Low to $0 out of pocket expenses
Helps pay your share of co-insurance, co-pays, deductibles

The Cons

Premiums
No dental, vision or hearing coverage outside of Medicare approved items

Medicare Advantage Pros and Cons

Medicare Advantage combines the following into Part C:

Part A (Hospital Insurance)
Part B (Medical Insurance)
and usually Part D (Drug Insurance)

Medicare Advantage comes in the form of an HMO or PPO. You are required to use the plan’s network of doctors and hospitals. If you go out of network, you will have higher out of pocket costs. When you have a Medicare Advantage plan you cannot use Original Medicare or buy a Medigap policy.

Many people enjoy the low premium associated with a Medicare Advantage plan. However, that low premium also means fewer benefits. Let’s face it, you’re not going to get something for nothing.

You may pay little now, but a Medicare Advantage plan can make you pay a lot later.

Medicare Advantage Cons:

What are the major disadvantages of MAPD?

It can be difficult to find covered medical care if you travel out of your area.
Receiving emergency or urgent care can also be difficult due to networks and rules.
You must follow the rules established by the plan in order to be properly covered.
The networks can change at any time and your continuity of care can be interrupted.
Maximum Out of Pocket expenses reset at the beginning of each calendar year.
Plans can be financially unstable leaving your medical coverage vulnerable.

Personal Experience

Personally, I can speak about the financial unstableness of Medicare Advantage plans. My mother signed up for a Medicare Advantage plan when she retired. At the time, she didn’t want to spend money on a Medigap premium.

I gave her all the reasons she shouldn’t choose Medicare Advantage. But just like kids, parents have minds of their own too. She went ahead with her decision. A year later the Medicare Advantage plan went bankrupt.

What did this mean for my mom and thousands of other policyholders? It meant they were forced back to Original Medicare without any additional coverage for at least 30 days.

It didn’t take much to convince her to buy a Medigap plan. But she was still left vulnerable until her Medigap policy became effective. It was a very stressful time for her and many other seniors.

Needless to say, she was relieved to get out of the Medicare Advantage nightmare. Medigap is serving her well and she loves the freedom and peace of mind her plan provides. She now gets to visit her dermatologist who wasn’t available in the Medicare Advantage HMO network.

Bottom line

Are Medicare Supplement plans worth it? Absolutely! Contact us today if you’re thinking about a Medicare Supplement. REMEDIGAP is a licensed independent broker and has access to the top rated Medigap companies. We can analyze the best plans in your area and answer any question you have about your Medicare needs.

Michael Quinn

Michael Quinn is a licensed Medicare insurance expert and cofounder of REMEDIGAP. With over a decade of experience, he helps people compare coverage options with clear, unbiased guidance. His insights have been featured by USA Today, NerdWallet and many other publications.