Do You Need Medigap Insurance?

Before they turn 65, or before they go on Medicare, many people have a health insurance plan that requires them to pay a coinsurance, which is usually a percentage of the service fee after the deductible has been paid. With such plans, there's an annual out-of-pocket maximum that the insured must pay before the insurance company will start paying for 100% of the covered claims for the year in question.

With Medicare, however, there is no out-of-pocket maximum. The Original Medicare Plan covers only 80% of your health care costs, so the remaining 20% that you must pay on your own can add up over time and place you in a financially vulnerable position. Investing in a Medicare supplemental insurance policy solves this problem by covering out-of-pocket costs that aren't paid by Medicare, such as copayments and deductibles.

---