Do I need a Medigap Policy?

The decision to purchase a Medigap policy rests on the desire to have certain out–of–pocket medical costs covered. The Kaiser Foundation's Medicare Chartbook indicates that out–of–pocket costs increase with age and deteriorating health conditions. Medigap policyholders have decided that it is worthwhile to pay a monthly or annual premium to have some of these expenses paid.

What are the potential out of pocket costs?

Out–of–Pocket Costs for 2012 (from Medicare.gov)

  • Part A – Hospital
    • Deductible – $1,156 for days 1–60 in a hospital during a benefit period
    • Co–Insurance – $289 per day for days 61–90 in the hospital; $578 for days 91–150; and all costs for any days over 150.
  • Part B – Medical Insurance
    • Deductible – $140 per year
    • Co–Insurance – 20% of all services after the deductible
    • Excess Charges – if you go to a doctor that does not accept Medicare assignment and they charge you more than the Medicare approved amount you are responsible for the difference.

One of the more challenging expenses to estimate is the Part B co–insurance which could be many thousands of dollars for an expensive medical bill. Also, having coverage for the Part B Excess Charge provides additional freedom to visit a provider that does not accept Medicare Assignment.

Many people choose a Medigap policy so they are not at risk of paying the out–of–pocket amounts. Consumers should evaluate their unique situation.

Have Questions?

If at any point you would like to speak with someone for more information,
contact 1-800-258-7041 or fill out our Request Information form!