In dictionaries the word gap means a break, a separation, an incompleteness or deficiency. In Medicare it means the same thing, but it refers specifically to something that is missing from your health insurance coverage.
Many seniors make a critical mistake when they buy into government literature that explains how Medicare pays for eighty percent of your healthcare. This is not true. What they really mean is Medicare pays for eighty percent of major medical expenses. As a result, millions of Americans are totally unprepared to deal with the true cost of their health and wellness in retirement.
Medicare Costs
Original Medicare Part A (hospital insurance) and Part B (medical insurance) creates a number of cost gaps. In fact, every deductible, copayment, and coinsurance is a cost gap, because it’s a break in your coverage, and you must pay the gap out of your own pocket. One way to fill this gap is with Medigap, also known as Medicare supplement insurance.
Medigap is insurance from a private company that supplements Medicare coverage. You may buy a Medigap policy anytime of the year unless you have a Medicare Advantage Plan. That’s because these two types of health insurance are not compatible.
In order to buy a Medigap policy you must already have Medicare Parts A and B. Though Medigap policies differ, the various lettered plans (A through N) are standardized. Not all Medigap policies are available in all states.
A Medigap policy covers just one person; each spouse must have their own Medicare Supplement Policy. You can buy Medigap policies from any insurance company that sells them; there is no difference in the same letter policy from one insurance company to the other. Only the monthly premium is different from carrier to carrier, so it pays to shop every year.
Medicare Benefits
Original Medicare only covers major medical expenses. That means many benefits you need, such as dental, hearing, vision, and services for health, fitness, and well being are not covered. This is a huge gap. Unfortunately, these benefits are not covered by Medigap, because Medicare supplement policies mirror Medicare approved coverages.
The best way to obtain these benefits is to decide which of these benefits are important to you and then compare benefits to costs. Some Medicare Advantage plans offer a full range of coverage, but the cost may be prohibitive. A good place to find information on these benefits is Medicare.gov.
Prescription Drug Coverage
As you are probably aware, Original Medicare does not cover prescription medicines unless you are an inpatient. For most people this creates a huge cost gap, especially your doctors has prescribed a drug for long term care. To help close this gap the government created Medicare Part D plans for prescription coverage.
Medicare Part D works well for many people. However, it creates an enormous gap between the initial coverage period and when you qualify for catastrophic coverage.
- If you have Medicare Part D, one way to avoid reaching the gap is to use generic drugs, which are much less expensive than brand-name drugs.
- If you can’t afford your medications due to a limited income, the Social Security Administration may be able to assist through its Extra Help program.
Financial Disaster
The coverage gaps created by traditional Medicare health insurance are a financial disaster in waiting for many seniors. If you have a home or cash savings, you can watch it go up in a puff of smoke with just one critical illness or accident. With the rising cost of healthcare, can you imagine the financial impact to you of a week or two in the hospital? How about cancer, where chemotherapy costs thousands of dollars per treatment? With Original Medicare alone, you are responsible for more than twenty percent of the costs.
In conclusion, seniors, there are ways you can close the gaps and make your health care more affordable and less risky. Fill the gaps before it’s too late. If your income is limited, check to see if you are eligible for both Medicare and Medicaid (dual eligible). If you are a Veteran, make sure you are getting the VA benefits you deserve.