Is it Worth Having a Supplemental Insurance to Medicare?

Once they have reached the age of 65 years old, citizens in the United States are eligible to participate in Medicare, a national health insurance program. Original Medicare includes Parts A and B, although only A is mandatory. Original Medicare covers hospital stays, mental health services, preventive care, hospice and home health care. But Original Medicare also comes with co-pays, co-insurance charges and deductibles. You can buy Medicare supplement insurance plans to help with these charges, but beneficiaries often wonder if Medigap plans are worth the added cost.

Do You Have Original Medicare?

• Medicare supplemental plans only help pay deductibles, co-pays and co-insurance costs for Original Medicare Parts A and B.There are no Medigap benefits for Part D, which is sold through private insurance companies and covers prescription drug costs. You also cannot use Medigap with Part C Medicare, called Medicare Advantage. Medicare Advantage allows you to buy Part A and B benefits from private insurance companies. Medicare Advantage plans usually also offer extra benefits such as hearing and dental. But Medicare supplemental insurance cannot be used in combination with Medicare Advantage. Medigap may not be worth the extra cost if you only have one part of Original Medicare either, as even the most basic Medigap plan includes benefits for both.

Are You 65 or Older?

• Not all people who qualify for and use Medicare are seniors. People who have been eligible for or receiving Social Security disability benefits may be able to enroll, as can individuals with end-stage renal failure and Lou Gehrig's disease. However, most companies that sell Medigap offer no or few policies for people under 65. Companies that sell Medicare supplements to those under 65 often sell only the most basic plans or charge higher premiums. If you even have the opportunity, it may not be worth the cost and the limitations to buy Medigap if you are under 65.

Do You Need the Benefits?

• As of 2011, there are 10 different Medigap plans. Medicare supplements are standardized, which means the same plans have the same benefits, no matter which company you buy them from or where you live. Minnesota, Wisconsin and Massachusetts sell their Medigap plans in different forms from the standardized plans, but residents are able to buy the same benefits. The plans range from one with only the core benefits, Plan A, to those that offer extras such as foreign travel emergency insurance, like Plans C, D, F, G, M and N. The more benefits, however, the higher the costs. If you have no reason to believe you will need foreign travel insurance, you do not need to buy a plan that offers it for a higher premium. If you do not have Part B, you don't need a plan that mainly covers Part B services and co-pays. If you seldom use Part A and have no trouble paying the deductible and co-pays, it makes little sense to shell out a monthly premium for even a basic plan such as Plan A.

Can You Pay the Costs?

• Though they help you pay Original Medicare charges, Medicare supplements have their own costs. The more benefits a Medigap plan offers, the higher the premium. If paying the premiums for Medigap will strain your budget, it may not be worth it to you to buy one. Medicare supplements can cost thousands of dollars a year in premiums. Some, such as Plans K, L, M and N, also have their own co-pays and cost-sharing. High-deductible Plan F offers many benefits with lower premiums, but you will receive no coverage until you meet the annual deductible. The foreign travel emergency benefit has its own separate deductible as well.