What Every Retiree Should Know About Medicare vs. Medigap

Core Insights - Medicare Advantage plans may deny certain care that original Medicare would cover, with a denial rate of approximately 6.4% for prior authorization requests in 2022, although many denials are reversed on appeal [1] - The out-of-pocket spending cap for 2026 is set at $9,250 for in-network expenses and $14,750 for out-of-network providers, with some plans potentially offering lower caps [2] - A 65-year-old retiring in 2025 is projected to spend an average of $172,500 on medical and healthcare expenses throughout retirement, excluding long-term care and other services [5] Medicare and Medigap Overview - Original Medicare consists of Part A (hospital coverage) and Part B (medical insurance), with many enrollees also opting for Part D (prescription drug coverage) and Medigap plans for additional coverage [4][7] - Medigap plans, offered by private insurers, cover costs that original Medicare does not, typically covering 20% of expenses that Medicare does not [7][9] - The best time to purchase a Medigap plan is during the initial enrollment period for Medicare, as pre-existing conditions cannot be used to deny coverage at that time [8] Financial Considerations - Monthly premiums for Medigap plans range from $32 to $550, with many individuals paying between $90 and $300 [9] - Medicare enrollees must pay for Part B coverage, projected to be $206.50 for 2026, while some plans may have premiums as low as $0 [2] - It is crucial for retirees to prepare financially for healthcare expenses, as these can be significant over the course of retirement [5][9]