CHOOSING A MEDICARE SUPPLEMENT PLAN

Medigap Insurance is often referred to as Medicare Supplemental Insurance.  These Medigap/Medicare Supplement Policies help individuals pay for their share of Medicare expenses that Medicare does not cover and for which they are responsible.  

Medigap Policies are popular because they cover the cost of Co-Pays for Doctor visits, and they give their members the ability to access Medicare Healthcare providers in every state.

Cover cost-sharing items: Most new Medicare Beneficiaries are taken aback by the fact that Medicare pays 100% of their Part A Hospitalization but only 80% of their Medicare Part B services, leaving them responsible for the remaining 20% themselves.  This additional cost can be a real eye-opener for people. Many new Medicare beneficiaries are surprised to learn that while Medicare covers 100% of their Part A hospitalization costs, it only covers 80% of Medicare Part B services. This means beneficiaries are responsible for the remaining 20%. This additional cost can be quite a shock for many people, which is where Medigap insurance comes in. Medigap insurance, also known as Medicare Supplemental Insurance, covers that 20% for you. Additionally, Medicare supplemental policies can help cover cost-sharing items, such as co-pays and excess charges. Many new Medicare beneficiaries are surprised to learn that, while Medicare fully covers hospitalization costs under Part A, it only covers 80% of the expenses associated with Part B services. This unexpected financial responsibility can be a daunting revelation, leaving beneficiaries with the burden of the remaining 20%.

However, there’s a solution designed to ease this financial strain: Medigap insurance, also known as Medicare Supplemental Insurance. Investing in Medigap not only covers the crucial 20%, but it also takes care of additional expenses, such as co-pays and excess charges, allowing you to focus on your health rather than your bills. Don’t let unexpected costs catch you off guard—secure your peace of mind with Medigap insurance and ensure that your Medicare coverage works for you! icare beneficiaries are surprised to learn that while Medicare covers 100% of their Part A hospitalization costs, it only covers 80% of Medicare Part B services. This means beneficiaries are responsible for the remaining 20%. This additional cost can be quite a shock for many people, which is where Medigap insurance comes in. Medigap insurance, also known as Medicare Supplemental Insurance, covers that 20% for you. Additionally, Medicare supplemental policies can help cover cost-sharing items, such as co-pays and excess charges. Here, Medigap Insurance comes into play.  Medigap Insurance, also known as Medicare Supplemental Insurance, pays that 20% for you.  Medicare Supplemental Policies also cover cost-sharing items, such as co-pays and excess charges.

WHAT ARE GUARANTEED ISSUE RIGHTS FOR MEDICARE SUPPLEMENT PLANS?

WHICH MEDIGAP PLAN SHOULD I CHOOSE?

When you reach the age of 65, you can sign up for Medicare.  Your Guaranteed Issue Period includes the three months before your birth month, your birth month, and the three months after your birth month.  During this time, you can sign up for Social Security Benefits and Medicare.  You can choose to participate in Original Medicare, enroll in a Medigap Plan (commonly referred to as a Medicare Supplement Policy), or opt for a Medicare Advantage Plan.  During your initial guarantee period, you cannot be denied coverage for any reason, and all pre-existing conditions are accepted.   

Medicare Supplement or Medigap Policies are sold to Medicare Beneficiaries by private insurance companies, and they pay for the things that Original Medicare does not cover.  These include things like Cost Sharing of Part B services, Outpatient Services, physicians’ Co-Pays, and Excess charges. Medicare Supplement Plans allow you to:

• Use any Doctor or Hospital that accepts Medicare, anywhere in the US.  So, you can have peace of mind if you travel between residences or plan to visit friends and family out of town.
• I want you to know what your costs will be.
• Automatic Renewals – the insurance company can never drop you or change your coverage due to a health condition as long as you do not cancel your policy.
• Streamlined Claims Process – Medigap providers automatically have cross-filing with Medicare. So, whenever your doctor or hospital files a claim with Medicare, that claim is automatically filed with your Insurance company as well.

Some other things to know about Medicare Supplement insurance:

ALL MEDICARE SUPPLEMENT PLANS ARE STANDARIZED

Which Medigap Plan should I choose? The correct answer is the one that you feel the most comfortable and secure with. You do not want to just look at how things are today, but try to project what type of plan will suit you best 10, 15 and 20 years from now. Each Medicare Supplemental or (Medigap) Plan is identified by a corresponding and identifiable letter. Medicare refers to these plans. These are Medigap Plan A, Plan B, Plan C, Plan D, Plan F, Plan G, Plan K, Plan L, Plan M and Plan N. Each one of these lettered policies provides the same set of benefits regardless of which company you choose A Plan K Policy from United Healthcare will have the same benefits as a Plan K from BCBS or Mutual of Omaha.  

What differs is the pricing structure used by each company.  Every Insurance provider has its own pricing structure for each area of the country in which it operates. I have coverage for you and your family.  Medigap Plans C and F are only available to those people who were enrolled in Medicare before January 1, 2020.

In 2020, Medicare Supplemental Plan G became the most comprehensive plan. It works precisely like Plan F except that you pay for the Part B deductible once per year. Your premiums will be lower, though, and this can sometimes result in annual savings.  

For Medigap Plans K and L, after you meet your annual out-of-pocket limit and your annual Part B deductible ($203 in 2021), the Medigap plan pays 100% of covered services for the rest of that calendar year.

Plan N pays 100% of the Part B coinsurance, except for a co-payment of up to $20 for some office visits and up to a $40 co-payment for emergency room visits that don’t result in an inpatient admission.

Each Medicare supplement plan in the chart above is assigned a letter, A through N. Each plan letter provides a different set of benefits. However, each lettered plan must have the same standardized coverage regardless of which insurance company you choose. For example, Medicare supplement Plan N at Blue Cross Blue Shield has the same benefits as Plan N from Humana Healthcare.

Plan F is the only supplemental insurance plan that covers ALL of the gaps, leaving you with nothing out of pocket.  However, you are only eligible for a Plan F if you turn 65 before January 1st, 2020. There are others where you agree to share some of the costs, and in return, you receive a lower monthly premium. If you prefer something like this, in the middle, you could consider Plan G and Plan N, where you pay a few things yourself in exchange for lower premiums.

HOW DO YOU GO ABOUT PICKING A MEDICARE SUPPLEMENT /MEDIGAP PLAN?

Most people enroll in Medicare supplement plans G or N. That’s because these offer the most coverage. However, the reason for the choices is to let you decide what is most important to you. Some beneficiaries want a plan that covers all the gaps and leaves them with no worries about the cost of medical procedures. Others prefer a Medicare supplement plan in which they cover some of their deductibles and co-pays out of pocket in order to achieve lower premiums. Refer to our Medicare Supplement Plan Chart to compare the benefits of all plans side by side.

MEDICARE SUPPLEMENT PLANS DURING YOUR OPEN ENROLLMENT INTO MEDICARE

Medicare Open Enrollment is a one-time window to enroll in any Medicare supplement plan in your area.

According to Medicare’s Guide to Health Insurance, the best time to buy a supplement policy is during your one and only Guaranteed Issue/Initial Enrollment Period. 

During your one-time Medigap open enrollment, the Medicare supplement company cannot ask you any medical questions. They cannot turn you down for any health conditions. They cannot refuse to offer you a policy or charge you any additional amount due to health conditions, medications, or pre-existing illnesses. You will have your choice of Medicare supplemental plans.

After this window passes, however, future insurance companies with which you might apply can accept or decline you based on your health. That is why the Medicare Handbook states that open enrollment is the best time to enroll.

GUARANTEE ISSUE RIGHTS IF YOU ARE PAST AGE  65

Some people delay enrollment in a supplement because they have group health coverage through an employer.  Later, when you retire or lose that coverage, you have the right to purchase specific Medigap policies within the 63 days following the loss of your group coverage. This is referred to as your Medicare supplement guaranteed issue rights.

The guaranteed issue window operates similarly to open enrollment, except that it is a shorter period of time, and your plan choices are limited to Plans A, B, C, F, G, K, N, and L. The insurance company cannot deny your application for any health reasons.

CAN PEOPLE CHANGE OR SWITCH MEDICARE SUPPLEMENT PLANS ANYTIME?

You can apply to change your Medicare Supplement at any time, but if you are past your open enrollment window, you will have to answer health questions in most states.  The Medicare supplement insurance company will review your health history and medication history. They can accept or decline you. 

CHOOSING A MEDIGAP PLAN DURING YOUR INITIAL ENROLLMENT PERIOD (IEP)

In certain circumstances, an insurance company must accept you for coverage without asking health questions. For example, if you are on Medicaid and you lose your Medicaid eligibility, you have a short window to apply for Medigap without health questions.  Another example would be for someone coming off employer health coverage that is primary to Medicare. They will have a short window to apply for certain Medigap plans under guaranteed issue rules. 

HIGH DEDUCTIBLE MEDICARE SUPPLEMENT PLANS

How do high-deductible Medigap plans work?

Medicare Parts A and B pay 80% of covered costs. Full Medigap Plans F and G pay the remaining 20%, so you don’t have to pay out of pocket.  High-deductible Medigap Plans F and G don’t pay anything until you’ve reached your deductible, $2,780. If you have a High Deductible Plan G, you will also have to pay your Part B deductible, which is $240 in 2024.

While that sounds like a lot, many people who choose a high-deductible plan never come close to reaching their deductible. That’s because Medicare covers the full amount of many Preventive Care services, including:

• Flu vaccines and other immunizations 
• An annual wellness exam 
• Bone density tests 
• Prostate cancer screening — annual PSA blood test 

If you are generally healthy and you only go to the doctor now and then, chances are you won’t spend very much of your high deductible. 

Assuming you have a High Deductible Plan G (this doesn’t apply to High Deductible Plan F, which covers the Part B deductible), you’ll pay the Part B deductible first before your Medigap plan pays anything. Most people pay the Part B deductible during their first one or two doctor visits.  After that, the billing will look like this:

When your healthcare provider charges $200, Medicare Part B will pay 80%, or $160. The 20% that you will pay before reaching your Plan G high deductible would be $40. 

As you can see, if you’re generally well and don’t use healthcare often, you won’t spend enough to reach your deductible ($2,780 in 2024). 

The situation changes if you are hospitalized, because Medicare Part A has a $1,632 deductible per benefit period or episode of illness (for 2024).  In that case, you’ll pay a lot upfront.

To be safe, you’ll need to have enough money available to pay the $1,632 Part A and the $240 Part B deductibles, which don’t count toward meeting your Medigap high deductible. Then, you’ll need about $700 to cover the 20% of Medicare Part A and B costs due before you meet your Medigap high deductible. Added together ($1,600 + $ 240 + $940), that is roughly $2,780.

After you pay that, your Medigap high-deductible plan will pay your remaining eligible out-of-pocket healthcare costs, which, for most people, is everything — 100%. But that initial hospitalization charge could be a budget-buster.

WHAT TYPE OF PERSON SHOULD CONSIDER A HIGH-DEDUCTIBLE MEDICARE SUPPLEMENT PLAN?

Plans F and G are the most popular Medigap plans because they eliminate unexpected healthcare billing surprises. High-deductible F and G Medigap plans do the same thing, but choosing these plans means you have to have enough savings to pay the annual deductible upfront.

Premiums for the high-deductible plans are generally significantly lower than premiums for the full version. Most people will have years when they are sick enough to meet the deductible, but in some years, they won’t use enough healthcare to do so. Whether you’ll come out ahead in the end depends on how healthy you remain as you age, how long you live, and other unknowable things.

QUESTIONS YOU SHOULD CONSIDER WHENEVER YOU ARE THINKING ABOUT BUYING A HIGH-DEDUCTIBLE PLAN

ANNUAL PREMIUM INCREASES

Before you buy any Medigap plan, ask the person selling it how much the policy’s cost has increased over the last 10 years. The U.S. Department of Health and Human Services reports that the average increase was approximately 3.8% from 2010 to 2020.  But some insurance companies raise costs less than others. If the company’s initial price appears low, ensure that the premium price increases will also be reasonable. You can get this information from:

• Your State Insurance Department 
• Your local nonprofit State Health Insurance Assistance Program
• Your Insurance Broker

HONESTLY ASSESS YOUR HEALTH AND YOUR FINANCIAL SITUATION

While you might be healthy now, that could change in 10-15 years. It can be very difficult to change Medigap plans after you’ve made your initial choice. Don’t choose a high-deductible plan just because it is the best you can afford today.  It may be burdensome down the road if your finances and health worsen.

Until you meet your deductible, your healthcare providers will charge you 20% of your bill that Medicare hasn’t paid. Medicare will also send you a statement that tells you how much of your deductible you have met. Some people feel nickel-and-dimed by this billing and the necessity of keeping track of it. With high-deductible plans, it’ helps if you’s helpful to have patience for record-keeping.

IS IT DIFFICULT FOR YOU TO MANAGE YOUR MONEY?

THINGS TO REMEMBER:

• High-deductible plans — those that require you to pay $2,780 Out-Of-Pocket before your Medigap plan starts paying your expenses — can save you money on Medigap insurance if you have enough money to cover the deductible in a worst-case scenario.
• However, don’t just choose a plan because the premium is low. Consider your future health and finances.
• Could you ask your Broker for the premium increase history for each company you are considering?