If you are nearing the age to qualify for Medicare, or you have a relative in that situation, this is for you. If neither of those apply to you, you can abandon this ship now.
When I was coming up on my sixty-fifth birthday I felt like the most popular man in Wisconsin. Everybody wanted to sell me insurance. Specifically, Medicare supplemental insurance. I didn't want the attention. But they almost had me convinced that I NEEDED Medicare supplemental insurance.
That was their job.
They almost succeeded.
Their whole pitch is that Medicare pays only 80% of the charges, leaving you, the Medicare insured, responsible for 20% of the charges.
Of course, they won't lie to you. But they don't necessarily tell the whole exact truth, either. Let's say, for example, that you are going to have to have an out-patient surgical procedure that will cost six thousand dollars. They would like you to believe that you'll be responsible for $1200 plus the deductible. The deductible for 2016 is $166.
Looking at that, it sure seems to make sense to take the supplemental insurance at about $95 per month, which pays the deductible and that 20%. That will run you a yearly pay-out of $1140.
Here's what they don't tell you: Medicare always writes off a huge amount of the charge. A $6000 charge from the doctor might have an allowable Medicare charge of $2200. And that is the charge that the 80%/20% is based on.
If you have no supplemental insurance you'll be charged about $440 for your 20% share. Doesn't make that much sense now, does it?
I knew I was going to have surgery that I thought would cost about $6000. So I called Medicare and got the numbers on what the allowed charges would be and their assurance that I'd be charged 20% of that number. Which would be maybe $300.
It turned into two surgeries, plus diagnostics, that charged over $8000 before Medicare. My bill after Medicare will be under $600.
Everyone's situation, medical and financial, is different. And each state is different on how Medicare supplemental insurance is regulated and how it works. But research! Do your own due diligence. Don't necessarily take the word of the insurance companies as the last word. If all of them want to sell you insurance, it means they all see it as a good investment for themselves. Which might mean a poor investment for you.