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How Enrolling In A Medicare Supplement Plan Makes It Easier To Manage Your Finances During Retirement

Traditional Medicare helps reduce your medical expenses during retirement, but it doesn't cover the entirety of your medical bills — you're still expected to pay a portion out of pocket. Medical expenses can be highly variable, so these out-of-pocket expenses can make it harder to manage your finances during retirement if you need frequent medical care. One way that you can simplify budgeting is to sign up for a Medicare Supplement plan.

To learn more about how they work and how they can make it easier for you to budget, read on. 

What Does Medicare Supplement Insurance Cover?

Medicare Supplement plans cover the out-of-pocket expenses that you'd have to pay if you used traditional Medicare. For example, traditional Medicare has co-pays for doctor's appointments and nursing home care, and it has coinsurance for the care you receive during a hospital stay. When you have a Medicare Supplement plan, your health insurance carrier will pay these out-of-pocket fees instead.

When you enroll in a plan, you'll select a plan type that specifies which out-of-pocket fees you'll pay and which will be paid by your health insurer, allowing you to customize your coverage based on the amount of risk you want to take on and the monthly premiums you're willing to pay.

How Does Medicare Supplement Insurance Make Finances Easier to Manage During Retirement?

The biggest pitfall of traditional Medicare is that its coinsurance has no cap, and Medicare Supplement plans will let you avoid this. Traditional Medicare will pay for the majority of hospital care you receive, but you'll need to pay a percentage of the bill out of your own pocket. The coinsurance bill can be quite high, especially for a long stay in the hospital that requires intensive care or emergency surgery.

If you're facing a large coinsurance bill, you may be forced to make difficult financial choices. You may need to sell your home in order or sell stocks that pay great dividends in order to pay the bill. You may have been relying on the dividends from those stocks in order to finance your retirement, and you may not want to move after selling your home, so both of these choices can be tough. You don't have to worry about this situation when you're covered by a Medicare Supplement plan, as they'll take care of the coinsurance payment for you.

Medicare Supplement plans also make it easier to manage your healthcare costs. Traditional Medicare co-pays can vary month to month based on the number of doctor visits and specialist appointments you need to make. With Medicare Supplement insurance, all of these costs are handled by the fixed premium you pay every month. Your medical spending isn't as variable, which makes handling your budget during retirement easier.

If you want to simplify your finances during retirement, look into purchasing a Medicare Supplement plan. You'll avoid being forced to sell assets in order to cover a large coinsurance bill, and your medical costs will be less variable. You'll have more peace of mind and be able to relax better during your retirement when you don't have to worry about unexpected medical costs.