Ways to Supplement Your Medicare Coverage
There are a number of ways to fill gaps in your Medicare coverage and/or to get assistance with Medicare costs:
- Job-based insurance: If you or your spouse is still working, and you have insurance through that job, it may work with Medicare to cover your health care costs. You should find out whether your employer insurance is primary or secondary to Medicare. Primary insurance is health insurance that pays first on a claim for care. Secondary insurance pays after primary insurance—but may not pay at all in the absence of primary insurance.
- Retiree insurance: Some employers provide health insurance to retirees and their spouses to fill in the gaps of Medicare coverage. Retiree insurance always pays secondary to Medicare.
- Veterans Affairs (VA) benefits: If you are a veteran and qualify for VA benefits, health care and prescription drugs that you get through the VA may be the cheapest. The VA may also cover services that Medicare will not cover for you. VA benefits do not work with Medicare, and if you receive care outside of a VA facility you might need Medicare. Medicare does not pay for any care at a VA facility.
- Supplemental insurance (Medigap): A Medigap policy provides insurance through a private insurance company and helps fill the cost-sharing gaps in Original Medicare, for instance by helping pay for Medicare deductibles, coinsurances, and copayments. Depending on where you live, you have up to 10 different Medigap plans to choose from: A, B, C, D, F, G, K, L, M, and N. (Note that plans in Wisconsin, Massachusetts, and Minnesota have different names.) Each type of Medigap offers a different set of benefits. Premiums vary, depending on the plan you choose and the company you buy it from.
- Stand-alone Medicare private drug plan (Part D): If you have Original Medicare and want Medicare drug coverage, you need to sign up for a private drug plan (PDP). All Medicare drug plans have different costs and a different list of drugs that they cover (known as the formulary). Make sure the plan you choose covers the drugs you need at a cost you can afford. Also know that if you do not sign up for a Part D plan when you first become eligible, you may incur a premium penalty later on.
- Medicare Advantage Plan: These plans contract with the federal government to provide Medicare benefits. They must provide at least the same set of benefits offered by Original Medicare, but may have different rules, costs, and restrictions. For instance, Medicare Advantage Plans may require that you see health care providers in their network, and/or that you get a referral from your doctor before seeing specialists. Some private health plans offer extra, Medicare-excluded benefits, such as vision or dental care. While premiums may be low, service costs may be higher than in Original Medicare for certain services (or vice-versa). You also may pay more for your care if you do not follow the plan rules. Medicare Advantage Plans must have annual limits on out-of-pocket costs. Although these limits are usually high, they should protect you from excessive costs if you need a lot of health care. Benefit packages may change every year, so it is important to review your current coverage and options annually.