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

Disability Protection for Your Employees and Your Business

Disability Protection for Your Employees and Your Business

Many business owners are surprised to learn that wages paid to a disabled employee, not subject to a written plan, are not tax-deductible business expenses.

Encore Careers: Push Your Boundaries

Encore Careers: Push Your Boundaries

Ready for retirement? Find out why many are considering encore careers and push your boundaries into something more, here.

Saving for Retirement

Saving for Retirement

This calculator can help you estimate how much you may need to save for retirement.

 

Have A Question About This Topic?







Thank you! Oops!

Business Boosters: Tips for Building a Team

Here are a few tips on how to recruit, hire and onboard employees who fit your culture and share your passion to succeed.

Retirement Planning With Your Special Needs Child in Mind

Having a special needs child adds another layer of complexity to retirement planning. A special needs trust may help.

From Seeking Yield to Seeking Profits

How low can you go? We’re not talking about the limbo. We’re referring to sovereign bond rates.

View all articles

Can I Refinance My Mortgage?

This calculator can help determine whether it makes sense to refinance your mortgage.

Disability Income

This calculator estimates your chances of becoming disabled and your potential need for disability insurance.

Capital Gains Tax Estimator

Use this calculator to estimate your capital gains tax.

View all calculators

Your Cash Flow Statement

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

Long-Term-Care Protection Strategies

The chances of needing long-term care, its cost, and strategies for covering that cost.

Managing Your Lifestyle

Using smart management to get more of what you want and free up assets to invest.

View all presentations

When the Unexpected Becomes Reality

Disability happens to more people, more often than you may think, and it lasts longer, too.

Questions to Consider When Buying a Vacation Home

Doing your research is key before buying a vacation home.

Estate Management 101

A will may be only one of the documents you need—and one factor to consider—when it comes to managing your estate.

View all videos