There’s a big misconception about Medicare that tends to throw retirees for a loop. Many people go into retirement thinking their healthcare needs under Medicare will be covered at no cost to them. But there’s a world of expenses you might incur as a Medicare enrollee outside of your premiums.

As a Part A enrollee, you’re looking at an inpatient deductible of $1,632 per hospital visit this year. And you could face a world of expenses under Part B, from deductibles to coinsurance.

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That’s why it’s so important to save well for healthcare costs in retirement. But it’s also a good idea to put Medigap coverage in place. And if you’re not sure how Medigap works, here are three essential things to know about these supplemental insurance plans.

1. They’re only applicable to enrollees in original Medicare

The purpose of having Medigap is to have a way to defray some of the costs you might incur as a Medicare enrollee. But you should know that Medigap is only available to seniors who stick with original Medicare — Parts A and B plus a Part D drug plan.

Some retirees opt to sign up for Medicare Advantage instead of original Medicare. There can be benefits to doing so, like getting access to supplemental benefits Medicare doesn’t pay for and having an out-of-pocket maximum for the year that your plan sets. There’s no out-of-pocket maximum for original Medicare, though, which is why Medigap could come in very handy if there’s a year when you’re on the hook for a lot of extra expenses.

2. The sooner you sign up, the better

The cost of Medigap coverage will depend on the specific plan you choose and other factors, including your state of residence. But if you want to save money on a Medigap plan, sign up early — specifically, during your first six months after enrolling in Medicare Part B.

During that time, you can’t be denied any Medigap plan available in your state due to a preexisting condition. But beyond that window, you could be denied coverage, or get stuck paying a lot more money for it.

3. You shouldn’t just shop around based on cost

There are 10 different types of Medigap plans offered in most states. And each plan charges a different premium. But the coverage you get under one plan might differ tremendously from the coverage you get from another.

In this regard, Medigap plans are similar to Medicare Part D and Advantage plans. And sometimes, paying more gets you better coverage. So in the course of shopping around for a Medigap plan, don’t just look at the cost of the plan itself. Compare the details of each plan so you know what you’re getting.

Some Medigap plans, for example, will cover your Part A deductible in full if you need to be admitted to the hospital. Others will only cover a portion of it, or 0%. And not every Medigap plan covers your Part B deductible, either.

Medigap is an important add-on to original Medicare. But it’s important to go in prepared to buy that coverage. Spend some time reading up on Medigap so you’re able to find the optimal plan for your needs.

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