Is Medicare Enough Health Insurance? Your Answer

Once you reach age 65 you will be eligible for Medicare and all the bells and whistles that come with it. But is Medicare enough to take care of all your health insurance needs? In a word, no.

Consider to cost of hospital stays. Every time you are a hospital inpatient your Medicare deductible will set you back $1132. That’s going to hurt most retired people. And that’s one reason why many seniors are very interested in Medigap and Medicare Advantage plans to provide health insurance after retirement.

Medigap is private coverage. It picks up where Medicare stops. If you buy a Medigap policy you would also buy Medicare. Medicare Advantage on the other hand is a plan you would buy instead of Medicare and Medigap. The Medicare Advantage plan also provides for drug coverage while Medigap doesn’t.

So if you buy Medicare and Medigap you would also need to buy private insurance to get coverage for your medications. There are 10 supplemental plans that cover medications. They are known as Part A through Part J. The higher the letter the greater the coverage and the more expensive the plan is.

The most popular plans are Part J, Part C and Part F. The coverage is standard for each plan regardless of which insurance company sells it to you but the premiums can vary widely. That’s why it’s critical to do some comparison shopping. The following chart appeared in Investors Business Daily.

 

 

The problem is that buying a combination plan including Medicare, Medigap and a supplement often costs more than buying Medicare Advantage.

That being the case, why would anyone buy the combination plan when they can get similar coverage for less money through the Medicare Advantage plan? They do so because they want freedom to choose. The Medicare/Medigap/Supplement combination allows users to keep their own doctors and Medicare Advantage plans don’t. And the combo package gives you better coverage if you travel out of state too.

The bottom line is the Medicare on its own isn’t enough. You need to buy either a combination plan or Medicare Advantage. Medicare Advantage will save you money and the combination plan will give you more choice.

Which medical insurance alternative are you using? Why?

Outside Resources:

WeissRatings.com to check the ratings of each insurance company’s financial strength.
E-Medigap.com covers many states and 14 different insurance companies.
MedicareSupplementPlans.com provides information for plans offered in California