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Money Matters With Jamie Kresge

Medicare is the federally administrated health care plan for individuals over the age of 65, and for certain individuals under the age of 65 with specific disabilities or diseases. It is designed to help pay for many health care services and supplies that an individual might need, but it does not cover everything. After receiving health care services the individual is often required to pay a percentage of the covered service – sometimes up to 25 percent of the Medicare approved cost of a service. For a person living on a limited income, these costs not covered by Medicare can be a big drain on their resources. One major or catastrophic illness and your life savings could be wiped out.

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There is an option available to help you cover the “gaps” in coverage that exist in Medicare. These plans are known as Medicare Supplement Insurance policies, or Medigap Policies. A Medigap policy is sold by a private insurance company and can help you pay for the expenses not covered under Medicare.

Traditional Medicare coverage is composed of two parts. Medicare Part A is hospital insurance, covering inpatient care in hospitals, skilled nursing facilities, hospice care, and home health care. Medicare Part B covers doctors’ services and outpatient care such as physical or occupational therapy. Part B also helps to cover some preventative services (like mammograms) designed to help maintain health or prevent an illness from getting worse. If you or your spouse paid Medicare taxes while working, then Part A is provided premium free. There is a monthly premium for Part B coverage that is based on income levels.

November 1 begins the open enrollment period for Medigap policies. What this means is if you currently have a policy that you are not happy with, or you don’t have a policy at all, beginning on that date you can change your current Medigap policy. If you want to purchase Medigap insurance, then you need to be enrolled in both Parts A and B of Medicare.

There are several different factors to consider when deciding what type of Medigap policy would fit your needs. They include:

Cost. There is a monthly premium associated with a Medigap policy. A policy you select needs to be affordable for you. Besides the regular premium, you need to consider the other costs associated with the plan. Is there a deductible associated with the policy, and if so how large is it? What is expected from you in terms of copayments for doctor’s visits, tests, hospital stays, etc.? Are there separate deductibles for prescription drugs (if they are covered under the policy)?

Benefits. What kinds of benefits are available with a specific Medigap plan? Does it provide eye exams and dental benefits as well as medical coverage? Ordinarily the more benefits associated with a policy means a higher premium for the insured.

Doctor and Hospital Choices. Can you choose your own doctor and hospital, or do you need to use one specified by the Medigap insurance policy? If you need to see a specialist, will you have to get a referral for the Medigap policy to pay for the visit, or can you self refer?

Prescription Drugs/Pharmacy Choices. Does the Medigap policy provide prescription drug coverage? If so, are the medicines you use on a regular basis on their list of covered drugs. Can you pick any pharmacy you like, or are you limited to specific ones?

Choosing the right Medigap policy that meets your needs (both medical and financial) can be a difficult and confusing process. I recommend consulting with a qualified financial planning professional to assist in selecting the policy that best fits your life situation.

Jamie Kresge is the owner of Abington Financial Group, serving the community since 1993. Contact him at (570) 586-1013 or www.abingtonfinancial.com. The content provided in this article is meant to be general in nature, and is not specific to any situation. This information should not be used as a substitute for personal research and conversations with a qualified financial advisor. Securities offered through SagePoint Financial, Inc., member FINRA/SIPC. Abington Financial Group is not affiliated with SagePoint Financial, Inc. or registered as a broker-dealer or investment advisor.