One of the great things about traditional Medicare is that if you can afford a comprehensive Medicare supplemental insurance policy, “Medigap,” you do not have to worry about out-of-pocket costs for services that Medicare covers. The catch is that the cost of that supplemental insurance policy can be high. Allison Bell reports for ThinkProgress that, increasingly, people are opting for lower-cost Medigap policies.
Signing up for traditional Medicare and buying a lower-cost Medigap policy is actually a smart alternative to Medicare Advantage, through which people get their Medicare benefits through private insurers. With Medicare Advantage, depending upon the plan you choose, your out-of-pocket costs for in-network care alone can be as high as $7,550; the average is about $5,500. And, in Medicare Advantage, you can’t buy a policy to protect you from those costs, much less for your out-of-pockets costs for out-of-network care.
Many people choose traditional Medicare over Medicare Advantage because they do not want to restrict their access to doctors and hospitals. But, because Medicare does not have an out-of-pocket limit, to protect themselves from financial risk, they usually buy a Medigap policy if they don’t have retiree coverage or Medicaid to fill gaps.
A new poll shows that about one in three people who enroll in traditional Medicare choose Plan N. Plan N fills most gaps but does not cover physicians’ excess charges if you see doctors who do not take assignment. The good news is that about 90 percent of doctors take assignment–accept Medicare’s approved rate as payment in full, so having coverage for physicians’ excess charges is often not necessary. And, plan N costs less than other Medigap options.
Still, about two in three people who enroll in traditional Medicare choose Plan G, which covers all out-of-pocket costs with the exception of the Part B deductible. The advantage of Plan G is that when you need health care, you don’t need to worry about the cost.
Here’s more from Just Care:
- Four things to think about when choosing a plan to fill gaps in Medicare, a “Medigap” or Medicare supplemental insurance plan
- Four things to think about when choosing between traditional Medicare and Medicare Advantage plans
- If you’re making a Medicare choice, don’t trust the insurance agent
- The wrong choice of Medicare Advantage plan could kill you
- Inappropriate Medicare Advantage care denials appear widespread
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