Medicare Supplement plans are designed to fill in the gaps in Original Medicare coverage. Original Medicare—Medicare Parts A and B—covers approximately 80% of the total costs of medically necessary healthcare for enrollees, but the remaining 20% can result in high out-of-pocket costs. For example, a $50,000 hospital bill could leave someone on Original Medicare alone with a $10,000 portion of the bill to pay out-of-pocket. Medicare Supplement plans are private insurance plans you can add on to your Original Medicare to help out with those remaining out-of-pocket costs. Here is our guide to 4 ways you can use a Medicare Supplement plan to save money on your health costs:
1. If You Receive Medical Care Regularly
People who go to see a provider of any kind of medical care in a clinical setting regularly are likely to save money in the long-term by purchasing a Medicare Supplement plan. This is because while many clinics, doctor visits, specialists, and other health services are covered under Original Medicare, there are deductible, copayment, and coinsurance costs associated with each visit that add up.
As long as these out-of-pocket costs add up to a number greater than the amount of your Medicare Supplement plan’s premium, you will save money long-term if you purchase one. If you are using a medical service regularly—such as a routine doctor visit to manage a chronic condition—chances are you owe more in total out-of-pocket costs than the cost of a premium.
2. Avoiding Charges for Pre-Existing Conditions
During specific times, Medicare Supplement plans are available to consumers without underwriting, which means you get the best rate despite your age or any pre-existing health conditions. Buying a Medicare Supplement plan during this window can save a huge amount of money in the future by making sure any pre-existing conditions you have now or develop later don’t drive up the cost of your health coverage over the years.
In order to get this benefit, you have to sign up for a Medicare Supplement plan during either your Medigap Open Enrollment Period (Medigap OE) or if your life circumstances qualify you for Guaranteed Issue Rights. The Medigap OE is a six-month window that starts on the day when your Medicare Part B begins. Some circumstances that qualify for Guaranteed Issue Rights are a loss in health coverage outside of your control or moving outside your health plan’s service area.
3. In Case of an Emergency
Even if you don’t use medical services often or have any ongoing doctor visits, in the event of an emergency you could still be hit with huge hospital bills. Emergency room visits, ambulances, and surgeries are some examples of expensive possibilities we can rarely plan for in advance.
In addition to the approximately 20% out-of-pocket costs you’re likely to be responsible for in case of a medical emergency, there are also limits on how long hospital stays are covered under Original Medicare. Medicare Part A will generally cover up to 90 days of hospital costs within any given benefit period. Medicare also provides 60 additional Lifetime Reserve Days that provide coverage beyond the first 90 days, but once you use up your Lifetime Reserve Days, they don’t refresh at the start of the next benefit period.
After your guaranteed hospital days are up, if you don’t have a Medicare Supplement plan to fill in the gap in coverage, you will be responsible for 100% of the remaining hospital days until your next yearly pay period begins. Medicare Supplement plans pay for hospital visits 365 days out of the year.
4. If You Travel Out of the Country
Original Medicare is a national program and only covers the costs of care received in the U.S. states and territories. If you find yourself outside the country when you need services, you will end up being responsible for 100% of the costs.
However, many of the most popular Medicare Supplement plans—including plans F, G, and N—cover 80% of emergency health services received in foreign countries up to $50,000. If you’re someone who travels outside the country, this travel coverage can be a huge benefit.