MEDICARE SUPPLEMENT PLANS
Medicare supplement plans are supplemental insurance policies that cover health care costs left behind by Original Medicare (Parts A and B). In 47 states, Medicare supplement plans are standardized with the letters A through N (plans E, H, I, and J are no longer available for sale). Each lettered plan offers a different level of coverage and this insurance type also goes by the name Medigap.
Plans are standardized which means that all plans are compatible across the country (except Minnesota, Massachusetts, and Wisconsin which have plans standardized in different ways).
Supplemental plans are only available to individuals, so you can’t have group Medicare Supplement plan insurance. This means that you can’t share that plan with your spouse, each of you needs to have plans of your own according to health care needs.
Policies are sold by private insurance companies and provide you coverage for taking care of costs like deductibles, copayments, and coinsurance. Insurers pay monthly premiums for Medigap directly to the insurance provider.
What is covered under Medicare Supplement Plans?
Medicare Supplement Plans must cover for same health services as Original Medicare but you will no longer be responsible for out-of-pocket costs like coinsurance, copayments, and deductibles. However, how much is covered depends on which type of supplement plan you choose to purchase.
Therefore, all plans must cover benefits like:
- Part A coinsurance costs after additional 365 days are used up
- Part A coinsurance and copayments for hospice care
- Part B coinsurance and copayments
- First three blood prints for a medical procedure
With some supplement plans, which have a wide range of coverage, you get some additional benefits to help you with covering costs like:
- Part A deductible
- Part B excess charges
- Part B deductible
- Foreign travel emergencies
- Part B preventive care coinsurance
- Skilled nursing facility care coinsurance
However, from January 2020 sold to people who are new to Medicare can’t have Part B deductible covered. Because of these new rules, Plans C and F are no longer available for new enrollees.
What services aren’t covered under Medicare Supplement Plans?
Medicare Supplement Plan policies usually don’t cover for:
- Dental and vision care
- Long-term care
- Hearing aids
- Private-duty nursing
What are the costs of Medicare Supplement Plans?
We have talked about how Supplemental Plans must offer some basic benefits, but each plan has its monthly premium. Premiums can differ from plan to plan and the costs of premiums depend on which plan you choose to purchase. Because of this, you might consider carefully every plan and choose the one that fits your budget and healthcare needs. You can always talk with a licensed Medicare broker if you are not sure which option is best for you.
Based on your insurance policy provider, the following costs could be:
- The community is not age rated: can charge premiums regardless of age
- The issue age rated: plans that base your premiums on your age (when you first enrolled in the policy)
- Attained age rated: premiums are based on your age but the rate increases as you get older
However, these costs can change because of some factors:
- Spouses discounts, discounts for women, discounts for multiple policyholders
- Different premiums if you don’t have guaranteed issued rights
- High deductible options for plans F and G in some states
Medicare Supplement Plans enrollment
You must be enrolled in Original Medicare (Parts A and B) to be eligible for Medicare Supplement Plans. There is a Medigap Open Enrollment period which begins in the first month when you are 65 and enrolled in Medicare Part B. This enrollment lasts for six months and it is the best time for you to enroll in the Medicare Supplement Plan because of having a guaranteed issue right to join.
However, if you decide to enroll later during annual open enrollment periods you may be denied based on your pre-existing conditions or pay higher premiums for your medical history (don’t have guaranteed issue rights so you need to answer health questions and the insurer can deny your request based on findings).
What is Medicare Supplements Plan guaranteed issue right?
Guaranteed issue rights forbid insurance companies to deny your Medigap policies based on your pre-existing health conditions. With this, beneficiaries are protected by law from medical underwriting.
Your guaranteed issue right is valid in these occurring events:
- Need to switch to Medicare Advantage so you need to drop your Medicare Supplement policy
- want to switch from Medicare Advantage to Medicare Supplement in your first year
- Medicare Advantage Plan is no longer available in your living area
- Your insurer declares bankruptcy
Medicare Supplement Plan vs. Medicare Advantage
Both Medicare Supplement plans and Medicare Advantage plans are sold by private insurance companies and you need to be enrolled in Original Medicare to get either type of coverage. However, you can’t have a Medigap policy and Medicare Advantage at the same time so you need to choose one or another. If you have Medicare Advantage its plan becomes your primary source of coverage.
Medicare Advantage plans usually offer 0$ deductibles and no copayments for visiting primary care doctors, such as low copayments for visiting specialists. But, with those plans, you will have a restricted choice of providers, suppliers, and hospitals. Most Medicare Advantage policies include Part D (drug prescriptions) in their plan. Furthermore, some plans can cover visiting out-of-network doctors but at higher costs. Plans can cover your dental, vision, or hearing.
Medicare Supplement policies have more predictable monthly payments but they can be more expensive. For example, Medigap plans K and L have annual out-of-pocket limits. Most supplement plans do not include coverage for dental, vision, or hearing (a small percentage of plans offer those benefits), but they can cover travel emergencies. With these plans, you need to be enrolled in Part D (prescription drug coverage) if you want your dental coverage. As already mentioned, Medicare Supplement Plans are based on individual coverage so you can’t purchase them with your spouse.
Which Supplement plan should I choose?
We have established that not all plans share the same benefits. Some types of plans provide less coverage than others. First, you need to choose a plan according to your living area because, in Minnesota, Massachusetts, and Wisconsin policies are standardized differently.
However, most beneficiaries purchase plans F, G, and N because they have the most extensive coverage in comparison to other supplement plans.
Furthermore, if you want to choose the best option according to your healthcare needs the best thing to do is to talk with a licensed insurance broker, like those in Temmen Insurance. Those Medicare experts can help you in purchasing the best supplemental plan according to your budget and health conditions.