Medigap Insurance Rates

Medigap insurance is a massive business, one that will soon become the largest portion of the insurance agency with more and more Americans reaching retirement age. Unfortunately, obtaining information about Medigap insurance and how much it will cost you is no easy endeavor. We’ll explain in full the four main types of Medigap insurance, and how much protection is afforded with each.

Part A Medigap Insurance
Medigap Part A is the “free Medigap insurance” in that there are no premiums to pay for most working people. Over time, your taxes have helped to pay for your eventual Medicare needs, and as a result, you won’t have to pay for Part A coverage.

Medicare Part A covers home health care, hospice and in-patient hospital services. In general, anyone over 65 years of age qualifies immediately at no cost, and some states automatically enroll those who reach 65 and one half years of age. Never wait before you are automatically enrolled to start looking for Medigap coverage, because by then it is usually too late to make the switch to other types of insurance.

Part B Medigap Insurance
Part B Medigap insurance pays for all the services in Part A plus outpatient care, preventative care, and other smaller services which are not afforded by Part A. In general, you can expect that most doctors’ visits will be covered under the prevenativative care clause, and you will pay very little out of pocket to see a doctor.

While there are few upfront costs in seeing a doctor, you should know that Part B is not free. Instead, a small monthly premium must be paid which is based on your location and risk-pool. In general, this amount does not exceed $50 per month, and can be very affordable for people who are in a low-risk pool. In some cases, Part B is subsidized by your state government to make it free, or nearly-free. This is a great option for those who want more coverage than Part A, but cannot afford premiums in the hundreds of dollars per month.

Part C and D Medigap Insurance
After Parts A and B, C and D are the Medigap insurance types you’re most likely to hear about. Part C covers all of the medical costs in Parts A and B plus additional coverage for additional health services such as dental work, vision coverage, and health and nutritional wellness programs.

Part D provides all treatments included in Part C, but also adds in coverage for prescription drugs, which significantly increases its cost. Unlike Part A and B, C and D can be both very inexpensive or very expensive, depending on your risk-pool, your geographic location, and whether or not you can receive state subsidies. In Massachusetts, for example, Part C insurance is guaranteed to all citizens, and is afforded by a recent change to health care law passed by then-Governor Mitt Romney. To date, only three states buck the trend in providing such coverage, and you should speak with a local industry sales representative to see if you do qualify for free or reduced premiums for coverage.

One important note with C and D coverage is that it does not, under any circumstances, allow participation at any time. In fact, C and D only allow new members at predetermined times throughout the year when risk-pools and rates are reassessed. Generally, joining C and D—also known as Medicare Advantage—means that you are locked in for one full year.

Getting Advice
In this article we’ve covered only three parts of the massive Medigap insurance industry. While an overwhelming majority of Medigap patients choose between A, B, C and D, there are still eight other Medigap types that may be right for your own needs. If possible, consider speaking to a financial planner or a representative from the AARP, who can explain in-depth your choices, and provide a unique look at which plan fits your budget.

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