Reasons to Consider Medicare Supplemental Insurance


Deciding what type of insurance and how much coverage to purchase is a decision we make multiple times throughout our lifetime. From automobile and homeowners’ insurance, to life and health coverage, it seems we are continually weighing the benefits versus the cost of insurance premiums.

Determining whether to purchase a Medicare Supplemental Insurance policy is no different. Article after article has been written about the gaps in the Medicare insurance program. While the details of copay, deductibles, and coinsurance are important, we want to share two broad reasons why you should consider Medicare Supplemental Insurance.

#1 Your Exposure is Unlimited

Under Part A, for every hospital admission you are responsible to pay for a deductible, which for 2019 is $1,364. This means if you are admitted three times in a single year, your deductible requirement will be $4,028. Coverage under Part A also ceases after 60 consecutive days in the hospital.  

Like Part A, outpatient care under Part B also carries a per visit deductible, although at $185, it is substantially less. However, in addition to the deductible, you are also responsible for sharing 20% of the bill in the form of coinsurance – without any cap.

Lengthy hospital stays are becoming much less common. With so many services now performed on an outpatient basis, expensive treatments such as chemotherapy and radiation can make your out-of-pocket expenses soar into the tens of thousands of dollars.

#2 77% of Supplemental Policies Pay

Medicare Supplemental Insurance policies are sold by private insurers. As private companies, it is understandable they exist to turn a profit. But, this doesn’t mean insurance companies are not paying claims.

In fact, according to the National Association of Insurance Commissions, over 77% of every premium dollar collected was used to pay for medical expenses not covered by Medicare. Through 2015, that amount was more than $20B. Not every Medicare Supplement policy will pay claims equal to or higher than the premiums paid. But this doesn’t mean your unlimited exposure to medical expenses changes. It is deciding whether or not protecting your exposure with a Medicare Supplement policy makes sense to you.

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