medicare supplemental coverage

You’ve just turned 65, but you feel 20 years younger. You’re at the age where people enroll in Medicare, but you’re also pretty healthy.

Do you really need to sign up for Medicare’s supplemental coverage? You might not realize it, but not signing up can have a negative effect on your financial health regardless of your physical wellbeing.

What is Medigap?

Medicare only pays for about 50 percent of all medical bills. To supplement this coverage, seniors can buy a policy from a private insurer. This is Medigap, which offers 10 different plans with a variety of different benefits, letting you pick the combination that works for you.

Meanwhile, Medicare also offers federally-funded prescription drug plans, in which private insurers give limited coverage to senior citizens and people with disabilities.

Buying into Medigap can mean higher premiums, something you’ll want to avoid if you don’t go to the doctor often or have regular prescriptions that need to be filled.

But if you get sick, you might end up having bills Medicare doesn’t cover and struggling to pay for new insurance plans.

You cannot be denied Medigap if you have a pre-existing condition if you apply within six months after signing up for Medicare Part B. If you don’t buy a policy right away, the plan can use medical underwriting to determine whether your application will be approved.  They can consider factors such as age, gender and pre-existing conditions and can levy higher premiums, limit your coverage or even deny your application.

Medigap and Medicare Part D

People who enroll in Medicare Advantage plans are ineligible for Medigap policies. However, if you pick Medicare Advantage as your primary insurance and later decide to go back to Medicare, you must pick a Medigap policy within your first year back on Medicare or risk not being able to access a policy.

Medicare beneficiaries also risk steep financial penalties for late enrollment in the Medicare drug benefit, or Medicare Part D. For every month you delay beyond the initial enrollment period, your Part D premium will go up at least one percent, so if your premium was $40 a month and you delayed enrollment by 15 months, you’d have to pay an extra six dollars every month.

There are some exceptions for both Medigap and Medicare Part D for people who don’t immediately enroll because they had other insurance. But if you avoid enrolling because you think you won’t need these plans, you’ll have a difficult time signing up later on.

Do you have additional questions about Medigap and Medicare? The elder law attorneys at Gummer Elder Law can help. We’ve spent years helping seniors deal with insurance issues to make sure they’re covered without spending too much. Contact us today to learn more.