Is it a realistic option to self-insure and skip Medigap Insurance? That depends on the size of your assets and your tolerance for risk (not to mention your willingness to administer payments to a multitude of medical providers). To address this question, let’s look only at Original Medicare and what it pays.
In 2022, Medicare Part A requires you to share the cost of medical services, as follows:
Hospital Copayments and Deductibles
- $1,556 deductible for Hospital Services
- For Days 1-60 of a Hospitalization, there is no additional copayment (besides the deductible)
- Days 61-90 you are responsible for $389 per day of coinsurance (that’s up to $11,670)
- Days 91 and beyond your share is $778 daily (up to 60 reserve days over your lifetime)
- Beyond lifetime reserve days, you are responsible for all Hospital costs.
Medigap Insurance helps with the deductible and copayments, depending on which Medigap plan you choose. That’s quite a bargain, considering the low cost of these plans.
Additional Copayments and Coinsurance
Following a lengthy hospital stay, your doctor may recommend rehabilitative care in a skilled nursing facility. If this care extends beyond 20 days, you pay a daily copayment of $194.50; then, you pay all costs after 100 days, which can run $500 per day, in many California facilities.
It should be mentioned that some skilled nursing home stays are not covered by Medicare at all, because they do not meet Medicare eligibility (for example, when your stay is not preceded by a 3-day Hospitalization). Private long-term care insurance exists to help with this financial exposure.
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