Original Medicare (Parts A and B) offers excellent healthcare coverage for older adults, but it does leave Medicare beneficiaries to pay for quite a few expenses out-of-pocket. If you have surgery or get admitted to a hospital for any length of time, your medical bills will quickly pile up. That’s where Medicare supplements come in.
Today, we’re going to discuss what Medicare supplements are, how much you’ll pay for one, who is eligible, and when to enroll.
Medicare supplements were designed to fill in the gaps left over by Original Medicare. (That’s why they’re also referred to as “Medigap” plans!) A Medicare supplement provides coverage for any service that is also covered under Original Medicare.
There are currently ten Medigap plans on the market today. They are designated by letters of the alphabet: Plans A, B, C, D, F, G, K, L, M, and N. Each of these have varying levels of coverage. The most popular Medicare supplements are Plans F, G, and N, as they provide the most comprehensive benefits. You can get an overview of each by looking at our chart below.
The federal government standardizes Medigap plans. What that means is that no matter which company you purchase a specific plan from, your coverage will be exactly the same. So, for example, if you purchase Plan G from Company A, it will provide the same coverage as if you purchase Plan G from Company B. The only thing the insurance company is allowed to change is the monthly premium, which is why it’s so important to shop around for coverage – there’s no need to pay more for an identical plan!
With a Medicare supplement plan, you don’t have to worry about which doctor or facility you receive care from because there are no networks. As long as your provider accepts Medicare, they’ll also accept your Medicare supplement, regardless of which insurance company you purchased it from.
The monthly premiums for a Medicare supplement will depend on which plan you choose. Since Plans F, G and N have the most benefits, they will also have the highest premiums. As we mentioned, you should compare rates from different insurance companies to find the lowest cost.
You should also consider the history of rate increases of each insurance carrier. If the carrier is currently offering the lowest premium but has a high rate of increase, you may quickly be paying much more for the plan than when you enrolled. This is why it is helpful to utilize the services of an independent agent.
An independent agent has contracts with many insurance companies, so they can compare rates for you. They’ll also be able to see the history of rate increases to make sure you won’t be paying high premiums in the upcoming years. Contrast this with working directly with one insurance company, who will only tell you what their own rates are, not those of their competitors.
Any Medicare beneficiary already enrolled in Medicare Parts A and B is eligible to enroll in a Medicare supplement plan. Most states offer all ten plans, but a select few may have more limited options. All of them offer the three most popular plans.
If you enroll in a Medigap plan as soon as you are eligible (more on that next), you have guaranteed issue rights. That means that the insurance company must issue you the plan, no matter your past or current health conditions. You cannot be denied coverage for any pre-existing condition. Also, no insurance carrier can disenroll you for developing conditions. The only way you could lose coverage is if you stop paying your monthly premiums.
The best time to enroll in a Medigap plan is during your Medigap Open Enrollment Period. This enrollment period is unique to you. It is a 6-month window that begins on your Medicare Part B effective date. As we mentioned, you will have guaranteed issue rights during this enrollment window, and you’ll generally have better prices. Once this window closes, you could be denied coverage for pre-existing conditions, or the insurance company could choose to charge you higher monthly premiums due to your health status.
If you miss your Medigap Open Enrollment Period, the next time you are eligible to enroll is during the Open Enrollment Period. This occurs every year from January 1 to March 31. You’ll need to pass medical underwriting to be granted a Medigap plan if you wait until this enrollment window.
Some states have unique rules around guaranteed issue rights. For instance, California and Oregon have a birthday rule. Every year around your birthday, you can switch from one Medicare supplement to another that has equal or lesser benefits without having to go through medical underwriting. In Connecticut and New York, you’ll enjoy guaranteed issue rights all year.
The simplest way to choose a Medicare supplement is to consult with a licensed, independent agent. We’ll take the time to get to know you, your healthcare needs, and your budget. Then, using all of that information, we will educate you on your Medicare options and help you sort through all the details.
Our assistance doesn’t end there. After you enroll, we’ll be following up with you to ensure you’ve received all the necessary documents and make sure you don’t have any additional questions. We’ll also be in touch anytime we find that you could save money by switching insurance companies.
It’s not too early to start planning your Medicare journey. Give us a call today and schedule a free consultation.
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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