According to the insurance experts, not purchasing Medigap or Medicare Supplement plans will mean being penny wise pound foolish. The question that many tend to ask about the proverb is how to apply the same when taking into consideration supplement insurance plans. Penny wise stands for unwise thrift. In today’s tough times, when medical treatment and doctor/hospital visits gone high, people especially those who are retired and of 65 and above age are, living on fixed income are sure to have hard time trying to meet their ends. Again, if part of the income is dependent upon bank interests or house rents, then the person is likely to live on reduced income because of low interest rates. Moreover rises in expenses on items like utilities, fuel, food and insurance will have to be met. Although harsh realities, they need to be faced with proper planning to survive. Cutting back on non-essentials and finding deals will be a great way to save precious money.
Emerging dangerous trend
The truth is that many are viewing Medicare Supplement plans as something non-essential and an unwanted expense. They are of the opinion that Medicare will cover everything and hence, Medicare Supplement plans will not be required. Medical care cost is increasing by about 6 to 10 percent every year and it is not likely to slow down. Common procedures such as the knee replacement will be covered partly by Part A like the board and room after meeting deductible. Doctor visits, surgery fees, commode, walker, therapy visits, etc. are subject to 80-20 coinsurance under Part B Medicare.
Average cost of board, care and room for a day in the hospital is $4350. Average hospital stay during to undergo surgery is 4 days. Then total amount is $17400, which is Part A expense. After paying deductible amount of $1132, Medicare will cover all of it. From $17400, the amount $1132 is to be subtracted thus giving total amount of $16268 covered by Part A Medicare. If the surgery is $55000, then Part A coverage of $16268 is to be subtracted from $55000 total cost and left with Part A deductible & Part B expenses of $38742, of which 20% is to be borne by the person. If deductibles are paid off, then $162+$1132=$1294 is exposited for 20 percent of $37178 or perhaps $7435.60. The person needs to take responsibility of $7500.
But Medigap or Medicare Supplement plans which covers the above coinsurance and deductibles will cost just about $100/monthly and can be a real savior.