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November 24, 2017
Do you have to have a supplement with Medicare?

Do you have to have a supplement with Medicare?

Over 11.2 million people have a Medicare Supplement, but is it required?

Let’s go through what a Medicare Supplement is, what it does, and why you might find that you need it.

Why do you need a Medicare Supplement?

To make things simple, Medicare covers about 80% of bills that are Medicare-approved.

This leaves you with a 20% coinsurance on all Medicare-approved bills.

In addition, you also have deductibles for hospital bills (Medicare Part A) and medical bills (Medicare Part B).

For Part A, that deductible is $1,408 and for Part B, that deductible is $198.

While the deductibles aren’t that bad when you compare them to regular health insurance deductibles, the coinsurance can be a major problem.

Major, unexpected health conditions are expensive. There’s no doubt about that.

For many seniors enrolled in Medicare, they rely on a Medicare Supplement, because they don’t want that 20% coinsurance hanging over their head.

If the worst does happen, a pile of expensive medical bills only makes it worse. That’s why a Medicare Supplement is so strongly recommended.

What would happen if you had to pay for 20% of a major surgery?

Heart Attack Example

Many sources state that the cost of a heart attack can range from $750,000 to $1 million.

With time, those costs will only continue to go up.

The bills come from a mixture of:

  • Hospitalization,
  • Rehabilitation,
  • Physician costs,
  • Hospital readmission,
  • Medications,
  • and more.

Those numbers are startling, we know. And what’s worse is that heart disease in general is the cause for about 25% of deaths in the United States. That’s over 616,000 people per year, and counting.

So, this example is more likely than we’d like to admit. Perhaps you even have a loved one who has experienced this first-hand.

Let’s break down the potential costs if you didn’t have a Medicare Supplement.

To make things simple, let’s say that the heart attack, when all is said and done, costs $750,000.

The 20% coinsurance on that dollar amount is $150,000.

That makes the deductibles look like peanuts, which would end up being around $1,500.

At the end of the day, your heart attack would cost you about $151,500.

Now, let’s look at the costs if you had a Medicare Supplement. For this example, we’ll say that you have a Medigap Plan G.

Plan G pays for the 20% coinsurance, and it also pays for the Part A deductible.

That means that your only bill from your heart attack would be $198.

  Heart attack without a Medicare Supplement Heart attack with a Medicare Supplement
20% coinsurance $150,000 $0
Part A Deductible $1,408  $0
Part B Deductible $198 $198
TOTAL About $151,500 $198

Hopefully, this example brings some clarity to you. A Medicare Supplement is more than just another insurance policy.

But do you have to have a Medigap plan? The short answer is no. You don’t have to have a supplement with Medicare, but many people choose to get one for needed financial protection.

It’s a blanket of protection that covers you under the worst circumstances.

And that’s why 11.2 million people wouldn’t go a day without it.

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