If you’re using Medicare or planning to join the program, you’re probably wondering if you should get some form of supplemental insurance. Life is unpredictable and an accident or a debilitating illness can result in thousands of dollars spent in treatment costs. If you want additional insurance against life’s unexpected surprises and costs, checking out the different Arizona Medigap plans is a good place to start.
Arizona Medigap plans in the USA
The US healthcare system is multi-leveled and complex. More than half of all coverage is delivered through programs such as Medicare, Medicaid, the Children’s Health Insurance Program and the Veterans Health Administration.
The majority of US citizens under 65 are insured through their employers. Some have private insurance, while the rest are uninsured. Public sector employees are ensured through the government.
Before you decide if Medigap is the right choice for you, familiarize yourself with all your health insurance options. It’s the only way to make an informed decision about your healthcare future.
You can do research on the topic online or consult insurance providers. You can also talk to people already using the choices you are considering.
What is Medicare?
Medicare is the federal health insurance program serving seniors over 65, regardless of their current health, medical history and income.
Individuals under 65 may be eligible for Medicare if diagnosed with end-stage renal disease (ESRD) or a qualifying long-term disability.
Medicare eligibility is linked to a person’s social security benefits. The program is available to people over 65 that have worked for at least 10 years, with social security and Medicare withholding tax deducted from their pay during that time.
Medicare is structured as follows:
Medicare Part A covers inpatient hospital care, limited skilled nursing care and hospice care. It’s premium free for people who have paid into social security for at least 10 years.
Medicare Part B covers non-hospital expenses, like doctor visits, blood tests, X-rays, diabetic screenings and outpatient care. Part B is available for a monthly premium.
Medicare Part C i.e. Medicare Advantage is offered by private companies as an alternative to Original Medicare. It often bundles all the coverage aspects of Medicare into one plan.
Medicare Part D covers the costs of prescription drugs. It’s available as a stand-alone plan through private companies. You can also get your Part D through Medicare Advantage.
Medicare enrollment is mandatory. As long as you have Medicare Part A, you can consider yourself covered. However, if you only have Part B, you may be subjected to a tax penalty for not having essential coverage.
What is Medigap designed to do
Medicare does provide a lot of coverage, but its scope is nonetheless limited. The purpose of Medigap is to help cover some of the costs left out by Original Medicare, like copayments, coinsurance, and deductibles.
This extra coverage allows beneficiaries to better control and predict their annual medical expenses.
Original Medicare and Medigap work together to provide better coverage. First, Medicare pays its share of the Medicare-approved amount for your healthcare services, after which Medigap covers its share.
A few points to remember:
Medigap plans are available as stand-alone policies from private insurance companies, for a monthly premium.
There are 10 standardized Medigap plans available in Arizona, identified by letters (A – D, F – G and K – N). The word standardized means that same-letter plans must offer the same benefits regardless of the insurance provider.
Premiums for same-letter plans vary greatly between providers, so you’ll have to do some research before choosing a plan.
Plan rates can vary depending on your age, place or residence, provider and plan type.
The most comprehensive and popular plan in Arizona is Plan F. This plan covers pretty much all out-of-pocket costs for Parts A and B. The other plans cost less, but allow more gaps to remain open.
Medigap policies are renewable. As long as you pay the monthly fee, your provider cannot terminate your insurance even if you have health problems.
The best time to buy a Medigap policy is when your Medicare coverage begins. If you join Medigap within the first six months of enrolling in Medicare Part B, insurance companies are obligated to sell you a policy regardless of your health status.
After this deadline, you can be denied coverage based on health issues, at the provider’s discretion.
Medigap policies don’t include prescription drug coverage. For this purpose, you will need a Medicare Prescription Drug Plan (Part D).
Reasons to buy a Medigap plan
When contemplating additional insurance, make sure to ask your doctor if Medicare will cover the services and supplies you need. Overall, Original Medicare doesn’t cover many services and items required by many seniors.
According to experts, you should get a Medigap policy if you can afford one, even if you’re currently in good health and don’t need additional insurance.
You won’t need a Medigap plan if you qualify for Medicaid, have an employment-based medical retiree option, if you’re already using a Medicare Advantage plan, and of course, if you are extremely wealthy.
Depending on the plan, Medigap will either pay all or some of the costs not covered by Medicare.
Your Medigap policy is designed to protect you against excessive out-of-pocket costs, especially if you are ill or severely injured, require prolonged hospitalization or require more care as you age.
For instance, if you are hospitalized and you only have Original Medicare, you’ll be required to pay a hospital deductible of $1,216 for each benefit period. For inpatient stays exceeding 60 days, you’ll be responsible for a portion of the daily costs from the 61st day onwards (coinsurance).
These costs will go up the longer you remain hospitalized. Once your lifetime limits are exhausted, you will have to pay the inpatient costs in full.
The same applies to doctor appointments and medical procedures. Your deductible is $147, after which you’ll have to pay 20% of the Medicare approved amount for doctor services and medical equipment. Depending on the bill, this can be a substantial amount.
Also, keep in mind that:
- Even if you finish this year without needing your Medigap policy, the situation may change next year.
- You should do your homework and check the provider’s reputation, including the claims-paying ability, service and customer care quality.
- If you move to another state after you retire, you may need to change your Medigap plan.
- One Medigap policy covers only one person.