Medicare supplement plans are sometimes referred to as Medigap plans because they help fill gaps in coverage left by Medicare Part A and Medicare Part B. You must enroll in Medicare Original Parts A and B to purchase a Medicare supplemental insurance plan. Most Medigap plans cover all or part of the 20% not covered by parts A and B.
Private insurance companies sell health insurance supplement plans. Each plan is required by the Centers for Medicare & Medicaid Services (CMS) to provide the same benefit coverage nationwide, but premiums may vary from provider to provider. All policies are intended for individual coverage only. Therefore, if you and your spouse need a supplemental health insurance plan, you must each purchase one separately.
What do health insurance supplement plans cover?
Medigap plans cover some or all of the following costs, with a few exceptions:
- Medicare Part A coinsurance and hospital charges for up to 365 additional days after exhaustion of Medicare benefits
- Medicare Part B coinsurance or co-payment
- Blood (first three pints)
- Medicare Part A palliative care coinsurance or co-payment
- Qualified health care co-insurance (plans A and B do not cover)
- Medicare Part A deductible (Plan A does not cover)
- Medicare Deductible Part B
- Medicare Part B Supplement (coverage only available in Medigap F and G plans)
- Foreign travel exchange (coverage not available in Medigap A, B, K and L plans)
- Medigap K and L plans pay for 100% of covered services for the remainder of the calendar year after you reach the disbursement limit and pay your Medicare Part B deductible.
Health insurance supplement plans generally do not cover the following services:
- Hearing aids
- Long term care
- Home care nurse
Currently, there are 10 Medicare supplement plans standardized with the letters A to N offered by private insurance companies. Visit the websites of insurance companies to review their Medigap plan offerings.
How Much Do Medicare Supplement Plans Cost?
The costs of health insurance supplement plans vary by state and insurance company. The main factors that determine the cost are your location and your age. Keep in mind that a policy that looks cheaper at age 65 could turn out to be the most expensive at age 85, so ask the insurance company how they price their premiums.
Policy prices are determined in three ways:
- Community rated: The same monthly premium is charged to all Medigap policyholders, regardless of their age.
- Issue classified by age: The premium is based on your age at the time of purchasing the Medigap policy. The younger your age, the lower the premium. The premium charges for this type of pricing will not increase due to your age, but may increase due to inflation or other factors.
- Achieved by age: The premium is based on your current age and will increase with age. While the premiums for this form of rating may start at the lowest price, they can eventually reach the highest price and can also be affected by inflation and other factors.
Not all companies offer all Medigap plans. Rates may vary by company and some plans may come with a high deductible option.
Who Should Buy a Medicare Supplement Plan?
“Anyone concerned about reimbursable Medicare expenses should consider purchasing a Medicare supplement plan,” says Brandy Corujo, partner and co-owner of Cornerstone Insurance Group in Seattle. “Medicare has a cost share in the form of deductibles and coinsurance. For example, there is a 20% coinsurance for all Medicare-approved services, with no direct exposure limit.
Consider the following when purchasing a health insurance supplement plan.
- You must enroll in Original Medicare, which includes Parts A and B, to be eligible for a Medigap plan.
- A Medicare Supplement plan is not the same as a Medicare Advantage plan. Medicare Advantage plans provide Medicare benefits, follow Medicare rules, and generally include drug coverage, while Medicare Supplemental plans are intended to fill in gaps in what your Medicare plan does not already cover.
- Each Medigap plan only covers one person, so spouses must purchase separate policies.
- The premiums are paid to the private insurance company, which is in addition to your Part B premium paid to Medicare.
- Plan costs vary from state to state, but all benefits of the plan are the same nationwide.
- Any standardized plan is guaranteed to be renewable even if your state of health changes.
- Medicare supplement plans sold today do not include prescription drug coverage. If you need drug coverage, you can enroll in Medicare Part D (prescription drug plan). Part D is offered by some private insurance companies and may require separate payments.
How to apply for a supplemental health insurance plan
The best time to apply for a Medicare supplement plan is during your six-month open enrollment period. Open enrollment begins in the first month that you are 65 and enrolled in Medicare Part B. After this one-time open enrollment, you may not be able to purchase a Medigap plan or you may have to pay significantly more.
If you or your spouse already have group health insurance coverage and are not ready to enroll in Part B, you can apply for Part B without penalty during a special enrollment period after the end of your enrollment period. initial membership. Call the Centers for Medicare & Medicaid Services (CMS) for details if you think you are eligible.
There are a few steps to follow when applying for a Medicare supplement plan.
Decide what benefits you want, then review Medigap A to N plans to see which ones meet your needs. Take your current and future health into consideration, and keep your family’s medical history in mind, as it can be difficult to change your diet later.
Find out which insurance companies in your state sell health insurance supplement plans and which offer the plan (s) you want. Visit Medicare.gov to search by zip code to find businesses in your area.
Contact that insurance company to request a quote and purchase your health insurance supplement plan. “An agent can assist with the process, or a customer can deal directly with the carrier. You can usually complete an application over the phone, online or in print, ”says Corujo.