Medicare Supplements Explained

Also known as Medigap plans, Medicare Supplements are some of the best health insurance coverage you can get anywhere. These plans act as secondary insurance to cover what is left over after Medicare Part A and Part B pay their share. Let explore how these plans work!

How Medicare Supplements Work

Compared to all of the other parts and plans that make up Medicare, the Supplement plans are very simple. These are the defining characteristics of Medicare Supplements:

#1 - They're Standardized

There are many Medigap options to choose from, plans are alphabetical from Plan A all the way through Plan N. The government requires that all Medicare Supplement plans are standardized by plan letter.

Coverage is standardized by plan letter
Plan G with Company A is EXACTLY the same as Plan G with Company B.

This means that when you are shopping for Medicare Supplement plans, you really are comparing apples to apples.

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#2 - No Networks or Referrals

Medicare Supplements are secondary insurance, so you remain on Original Medicare Parts A and B. This means your keep the “network” of Medicare itself. We refer to this as having no network at all because over 95% of all providers in the nation accept Medicare.

As long as a provider accepts Medicare, they are required to accept your Medicare Supplement as well. You don’t have to worry about certain doctors only accepting Company A’s Supplemental plans but not Company B. Its required.

If you travel frequently or have homes in different parts of the country, you’ll be able to use your plan no matter where you are.

#3 - Guaranteed Renewable

Medicare supplements are guaranteed renewable. This means that no matter how many medical bills you have, your plan can never terminate your coverage. The only way to lose your Medigap plan is if you stop paying your monthly premiums.

This is why we highly recommend everyone on a Medigap plan to set up automatic bank withdrawals each month. The last thing you want to happen is to forget to pay your bill and now you lose coverage that you may never be able to get back again!

Set up monthly payments from your bank account
If you’re in the hospital and forget to mail in your monthly bill, you could lose your coverage when you need it the most.

#4 - Easy Claims Processing

The claims process for Medicare supplements is very simple. Your provider files a claim with Original Medicare first since it will be your primary insurance. Once that is paid, they’ll send a copy of your claim to your Medicare supplement insurance company.

Medigap companies don’t get to question “hmm should we pay this claim?”. As long as the claim was approved by Medicare, the Supplement company WILL pay its share.

FAQ

Why Do Supplement Rates Go Up?

There are 2 types of rate increases for Medicare Supplement plans:

Planned – Many companies use “Attained Age” pricing to determine your rate. Each year, you are older and therefore will have a built in rate increase due to your higher age.
Unplanned – This happens when claims are higher than the insurance company expected. Higher inflation can also affect this.

What Makes One Company Better Than Another?

The major differentiator is rate stability. Often times we see new companies enter the market with the lowest price, only to raise rates significantly in the years to come.

Since your health must qualify to switch to another Medicare Supplement, these companies can trap many beneficiaries in their plans.

Because of this, we prefer companies that have a long history of stable rates and a reputation to uphold.

Are There Any Drawbacks to Choosing Medigap?

There are 3 main drawbacks to Medicare Supplements:

You will pay more on a monthly basis.
You will have to get a Part D drug plan separately.
You won’t get extra benefits like dental and vision coverage that is built into many Advantage plans.

Summary

Medicare Supplements are extremely popular, especially with people who were paying for employer group health insurance that cost more money and delivered less coverage. When it comes to medigap plans, the key decisions are: can you qualify for a Medicare supplement and can you afford one.

Rates are determined based on your zip code, age, gender, and smoking status. The simplest way to compare the different plans and prices available in your area is to schedule an appointment with our team.

Sylvia Gordon, aka Medicare Mama^®, is an expert on all things Medicare and Social Security. She is the 2nd Generation here at The Medicare Family and has served on the advisory boards of major insurance companies like UnitedHealthcare^®, Cigna, and Anthem. In her free time, she can be found taking care of her animals (dogs, goats, peacocks, chickens), and reading a good book. Learn More.

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