Donald C. Reutemann CFP®, RPA

(518) 688-2223

Insurance Read Time: 3 min

Understanding the Basics of Medigap Policies

Medicare coverage can be a critical component for living a healthy life in retirement, as well as for maintaining your financial independence during these years. Yet, as important as it is, Medicare does not cover the full range of healthcare expenses you may experience in your golden years.

To fill the holes that exist in Medicare, Medigap insurance can be purchased by individuals over 65 to supplement Medicare.

A Medigap policy is designed to cover expenses such as copayments, coinsurance, and even deductibles—the so-called gaps in Medicare. Coinsurance is only covered after you have paid the deductible unless you select a Medigap policy that also covers the deductible.

From A to N

Medigap is private health insurance that must follow federal and state laws designed to protect you. In most states, you can only purchase standardized coverage packages, or Plans, each of which is identified by the letters A through N.

These standardized packages must offer the same basic benefits regardless of which insurance company is offering it. Cost is usually the only difference between Medigap policies with the same letter.

All insurance companies are required to offer the Plan A standardized package. Each Medigap plan option (A-N) will differ on the benefits offered and the percentage of coverage for these Medicare gaps.

To get a better understanding of what each of these plans offer, go to www.medicare.gov and click on “Health & Drug Plans” at the top of the page. Then click on “What health plans cover.”

An Early Start at 65

You must have Medicare Parts A and B to buy a Medigap policy, and the best time to buy Medigap insurance is within the first six months you are both 65 or older and enrolled in Medicare Part B. By doing this you will not need to undergo a medical underwriting. For those with existing health conditions, this enables them to buy a policy at the same price that is charged for people in good health.

A separate Medigap policy must be purchased for each spouse.

If you are nearing retirement, or have already discovered that these Medicare gaps can be expensive, it may be time to determine if a Medigap policy is right for you.

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

Share |
 

Related Content

A New Way to Look at Your Bucket List

A New Way to Look at Your Bucket List

Bucket lists don’t have to be for tomorrow.

How Growing a Business is Like Raising a Child

How Growing a Business is Like Raising a Child

Careful and considered planning can help you nurture your business through its lifecycle into an independent enterprise.

The Importance of Business Valuation

The Importance of Business Valuation

You know your company inside and out. But do you know how much it’s actually worth on the open market?

 

Have A Question About This Topic?







Thank you! Oops!

Not Just Equal Pay, Equal Job Security

While this may feel like a golden age for the LGBTQ community—with the affirmation of marriage equality and a cultural shift embracing diversity—these successes may distract...

The Business Cycle

Understanding the economy's cycles can help put current business conditions in better perspective.

Starting a Roth IRA for a Teen

This early financial decision could prove helpful over time.

View all articles

Assess Your Life Insurance Needs

This calculator estimates how much life insurance you would need to meet your family's needs if you were to die prematurely.

What Is My Life Expectancy?

Estimate how many years you may need retirement assets or how long to provide income to a surviving spouse or children.

My Retirement Savings

Estimate how long your retirement savings may last using various monthly cash flow rates.

View all calculators

5 Smart Investing Strategies

There are some smart strategies that may help you pursue your investment objectives

Protecting Those Who Matter Most

The importance of life insurance, how it works, and how much coverage you need.

Your Cash Flow Statement

A presentation about managing money: using it, saving it, and even getting credit.

View all presentations

Jane Bond: Infiltrating the Market

Agent Jane Bond is on the case, cracking the code on bonds.

The Junk Drawer Approach to Investing

It's easy to let investments accumulate like old receipts in a junk drawer.

Behavioral Finance

An amusing and whimsical look at behavioral finance best practices for investors.

View all videos