5 Reasons NOT to do Medigap in 2024
When you’re getting ready for retirement and need to figure out your healthcare coverage, a lot of people say great things about Medigap plans. These special insurance plans are meant to help with the costs that regular Medicare doesn’t cover, and many seniors in the United States find them really helpful. But today, we’re going to look at the other side of the story. We’ll pretend to be the devil’s advocate and give you five good reasons to be careful before you decide on a Medigap plan. While these plans can be super useful, it’s important to know about their downsides so you can make a smart choice for your healthcare. So, if you’re unsure about Medigap plans, stick with us as we take a closer look at the reasons why some people might not want to choose them.
Reason # 1: Additional Monthly Premiums
People who have Medigap plans usually have to pay two different bills. The first one is for Medicare Part B, which you pay to the government. This helps you get basic healthcare coverage, like seeing a doctor or going to the hospital. In 2024, the Part B premium is $174.70 per month. The second bill is for your Medigap plan, and you pay this one to a private insurance company. This plan is like a helper for Medicare and covers things that Medicare doesn’t, like certain costs when you visit the doctor or hospital. So, having to pay both bills might sound like more money to spend, but many people think it’s worth it because it helps cover extra healthcare expenses and gives them peace of mind. It’s good to know that these two bills work together to reduce how much you pay out of your own pocket for healthcare.
Reason # 2: Medigap does not cover routine Dental, Vision and Hearing
If you have Medigap coverage, it’s crucial to understand that it won’t help you with things like dental checkups, eye exams, or hearing issues. Medigap plans focus on medical costs and don’t include dental, vision, or hearing care. To get coverage for these, you’ll need to buy extra insurance or special plans that deal specifically with those areas of health. Many people choose to get separate insurance or discount plans to make sure they’re covered for dental, vision, and hearing needs. So, while Medigap is great for medical costs, you’ll need to look into other options to take care of your dental, vision, and hearing health.
Reason # 3: Drug coverage is purchased separately
If you have a Medigap plan, it’s important to know that you must also get a Part D drug plan. Medigap plans are great for medical expenses, but they don’t cover the cost of prescription drugs. So, Medicare offers Part D drug plans to help with that. If you don’t sign up for a Part D plan when you first can, and you decide to get one later, you might have to pay a penalty. This penalty is like an extra fee added to your monthly premiums, and it’s there to encourage people to get drug coverage as soon as they can. So, to avoid penalties and have complete healthcare coverage, make sure you also have a Part D drug plan if you have a Medigap plan. In turn, this would be another monthly premium.
Reason # 4: Annual Rate Increases
Medigap plans can get more expensive every year, which means the cost goes up. These plans are offered by private insurance companies, and they can raise the price for a few reasons. One reason is that healthcare costs can go up, and the insurance company might have more expenses. Another thing is that your age can affect the price. So, while Medigap plans give you good coverage, you should be ready for the possibility of paying more as time goes on. It’s smart to check your plan each year and see if there’s a better deal out there or a way to save on costs.
Reason # 5: No Extra Benefits
Medigap plans are different from Part C plans because they don’t provide extra benefits. While Part C plans, also known as Medicare Advantage plans, often include additional perks like dental, vision, hearing, and even prescription drug coverage, Medigap plans focus solely on helping with the costs that Original Medicare doesn’t cover. Medigap plans are like puzzle pieces that fit together with Original Medicare to fill in the gaps in your healthcare expenses. They’re excellent for providing financial security, but they don’t offer those extra benefits you might find in Part C plans. So, if you’re looking for more comprehensive coverage, you might want to consider a Part C plan, but keep in mind that you’ll need to give up your Medigap plan if you make the switch.
In wrapping up our look at Medigap plans from a skeptical point of view, it’s clear they have some downsides. We talked about extra costs with two premiums and the need for separate coverage for dental, vision, and hearing. Plus, they lack the added perks that come with Part C plans. However, don’t forget that Medigap plans do a fantastic job of reducing your out-of-pocket healthcare expenses and providing peace of mind. Deciding on a Medigap plan depends on your specific healthcare needs, budget, and what matters most to you.
By weighing the pros and cons, you can make a well-informed choice that fits your situation and ensures you get the best possible healthcare coverage in your retirement. So, as you make your decision about Medigap, may it be one that brings you the peace and security you deserve during your golden years. If you need help deciding what is best for you, reach out to a local expert for advice.