!9# Are You Penny-Wise, Pound-Foolish When It Comes to Deciding on Medicare Supplement Insurance?

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How not purchasing a Medigap Plan can can be a penny-wise, pound-foolish decision.

What does this expression from three centuries ago mean?

Does it still relate to modern life?

How can you apply it when considering your Medicare Supplement Insurance options?

The definition of penny-wise is: unwise thrift.

The whole proverb is: Penny wise-and pound foolish, like the man who lost his horse from his penny wisdom in saving the expense of shoeing it a fresh when one of its shoes was loose.

Source: Dictionary of Phrase and Fable, E. Cobham Brewer, 1894

There is no doubt about it. Times are tough right now.Really tough and looking like they're going to get even tougher. Times are especially tough if you are over 65 and living on a fixed income.

If part of your income is dependent on interest from investments, you may be living on reduced income due to low interest rates.

If you depend on Social Security for all or part of your income, the lack of COLA increases for two years in a row reads like loss of income.

Rises in costs for must have items like food, fuel, utilities and insurance don't stop or slow because you didn't get a raise in your SS this year.

These are harsh realities. When you are facing reduced income and rising prices the natural and proper impulse is to cut back on non-essentials.

We try to trim spending where we can.

A dangerous trend is emerging. The tendency to view Medicare Supplement Insurance as a non-essential expense.

The cost of Medical care increases 6%-10% per year and that train is NOT slowing down. Just imagine 20% of all outpatient medical costs for even a common procedure like a knee replacement. The average total cost for a total knee is 45K-70K. Part A will cover your room and board for a semi-private room after a 32 deductible.

Your surgery fees,doctor visits, cane, walker, commode, therapy visits and more are all subject to the 80/20 co-insurance under Medicare Part B.

Let's crunch some numbers.

The average cost for day of room, board and care in a hospital is ,350.The average hospital stay for the surgery is 3-5 days. Let's use 4 days for our figures. ,350X 4 days is ,400. That is your Part A expenses. Medicare will cover all of it after you pay an 32 deductible.We will subtract the 32 from the ,400 to give us a total of ,268 that is covered by Medicare Part A.

Let's say you shop well and you find yourself on the mid range cost wise for the surgery. Let's use ,000. If we subtract the ,268 that Medicare Part A covered from the total cost of ,000 we are left with ,472 in Part A deductible and Part B expenses and at least 20% of that will be yours. If you consider that you will pay the deductibles right off the bat 32+2=94 you are left exposed for 20% of ,178 or 35.60. Almost 00 in bills that are yours and yours alone.

The cost of a quality Medigap plan that will cover the Medicare deductibles and co-insurance can cost as little as 0 per month.

When you really take a hard look at your potential exposure for a common procedure you may find yourself wondering,"Am I being penny-wise, pound foolish when it comes to Medicare Supplement Insurance? Can I afford to be?"

Are You Penny-Wise, Pound-Foolish When It Comes to Deciding on Medicare Supplement Insurance?

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Post Date : Nov 05, 2011 10:09:04 | Usually ships in 1-2 business days