Medicare Supplement Simplified:

A Medicare supplement plan helps pay for some of the cost that Original Medicare does not cover, such as copayments, deductibles, and coinsurance. They are commonly known as Medigap policies and are offered through private companies. There are 10 standardized Medigap plans to choose from in 2020. Because Medigap plans are standardized by CMS, all plans of the same letter will have the same coverage no matter the insurance company you select. Plans will range from letters A-N and will all have different levels of coverage. 

Medicare Supplement In Depth:

Many people are surprised to learn that Medicare has large deductibles for hospital coverage and only covers 80% of Part B charges. 20% of an ambulance and emergency room visit can be catastrophic to many Americans, especially ones on a fixed income. This is why Medicare Supplement plans were introduced not long after Medicare was started.  

Medigap plans make your payments for healthcare much more predictable and give peace of mind knowing you wont end up with a large bill in an event of an emergency. 

Medicare supplement advantages:

  • Freedom to choose your own doctors and hospitals**
  • No referrals or prior authorization required to see a specialist
  • Predictable out-of-pocket expenses for Medicare-covered services 
  • Nationwide coverage 
  • Guaranteed renewability – you can never be dropped or have your coverage changed due to a health condition as long as you pay your premiums
  • Standardized coverage – coverage levels will never change for the plan you enroll into

As you can see the main benefits of a Medigap plan are freedom to choose your physicians and stability in coverage. 

Important Medigap Facts:

  • You must be enrolled in Medicare Parts A & B
  • Plans do not include Part D coverage, you must add this separately
  • There is no annual election period for Medigap, you can drop your plan anytime
    • The annual election period is for Medicare Advantage and Part D plans
  • Medicare is individual and so is your Medicare Supplement. You and your spouse will need to get a seperate plan. 
    • Many insurance companies offer a household discount
  • Plan F will no longer be available to those turning 65 after January 1, 2020. 

How Medicare Supplement coverage works:

Medicare Supplements are referred to as “Medigap” plans because they fill in the gaps in Medicare coverage. These “gaps” include things like deductibles, coinsurance and copays. First, Medicare will pay its share of the Medicare-approved amount for covered health care cost. Then your Medigap will pay its share that is left over. 

You can use your Medicare Supplement plan at any provider in the nation that accepts Medicare. This makes Medicare supplements great for travel or for people who live in more than one state throughout the year.

Medicare Supplements plans do not include retail drug coverage, so you’ll want to purchase a standalone Part D drug plan for your medications. A Medicare Supplement does not cover routine, dental, vision or hearing services either. Since Medicare itself does not cover these items, so your supplement cannot pay anything toward them either.

Example:

John Smith is currently enrolled in Medicare and a Medicare Supplement Plan F. He visits his primary doctor where he receives health care services. The total Medicare-allowable rate is $1,000 for the visit. Per Medicare guidelines, Part B has a deductible of $198 and will only cover 80% of the cost after the deductible is met. So after Medicare pays its share John is left with a $398 balance. John will not have to pay any of this balance because his Medigap Plan F policy will cover 100% of the deductible and any cost there after. 

If John Smith did not have Medigap Plan F In this situation he would be liable for the deductible of $198 and then 20% of the remaining $1000 balance which would be an additional $200 for a total of $398.

What are the Medicare Supplement Plans?

Each Medicare Supplement plan has a letter assigned to it between letters A-N. Each letter has a different amount of standardized coverage for each plan. This is a very important distinction because the coverage is standardized for each letter. So all Plan G coverage will be the same no matter what insurance company you select. A United Healthcare Plan G will have the same coverage as a Blue Shield Plan G. 

The Medicare supplement chart below shows the 10 standardized Medicare supplement plans. These plans can be offered by insurance companies in most states. 

Medicare Supplement Chart 2020

How do I pick a Medicare Supplement plan?

With 10 plans and many companies offering Medicare Supplement plans, it can be overwhelming picking a plan that’s right for you. Most people choose Medicare supplement plans F, G or N, simply because these offer the most coverage. But of course the most important part is that you make the right decision for your needs and your budget. And we want to make sure we look at your needs and budget not only now, but 10 and 20 years down the road. While some want the peace of mind knowing all costs will be covered when the time comes and are willing to pay a higher premium. Others prefer a Medicare supplement plan that will cover some of the out of pocket costs and deductibles in favor for a lower monthly premium.

There is no wrong choice here, only the right choice for you. Sit down with your broker to go over your choices and make the right choice for you.

How Much Do Medicare Supplements Cost? 

Pricing for Medicare supplement policies varies by state, zip code, gender, tobacco use and age. The cost of healthcare can vary greatly state to state so some states are more expensive than others. For example, a Plan G for a turning-65 female non-tobacco user for around $115/month in California while the same policy would cost more than twice that in Florida. Couples may benefit from household discounts offered by many companies. For quotes in your own zip code, give us a call at +1 888-603-9445.

Medicare Supplemental Plans – Open Enrollment

The Medicare Supplement open enrollment period is a 6 month window starting on the first day of the month you start Part B and allows you a 1 time option of enrolling into a Medicare Supplement plan at the best available rate regardless of your health status, and they cannot deny you coverage. This makes open enrollment the best time to buy a supplement policy as you lock in the best rate and you cannot be denied. This open enrollment period is a use it or lose it period and cannot be used again.

During your Medigap open enrollment, you will have your choice of Medicare supplemental plans. Which every company you choose cannot ask you any medical questions, cannot turn you down for any health conditions and cannot charge you any additional premium due to health conditions, medications or pre-existing illnesses.

Outside of this period, insurance companies that you might apply with can ask you any medical questions, can turn you down for any health conditions and can charge you any additional premium due to health conditions, medications or pre-existing illnesses.

IMPORTANT: 

The Annual Election Period that runs from October 15 – December 7 each year DOES NOT apply to Medicare Supplements and you CANNOT change your supplement without answering health questions. Many people mistakenly believe they can change their Medigap plan during this time. The Annual Election period applies only to Medicare Advantage and Part D plans. 

Medicare Supplement:  Medical Underwriting

If you missed your open enrollment period and do not qualify for guaranteed issue rights, you can still apply for a Medicare Supplement at any time. But, the insurance company can and will ask you health questions and deny you for pre-existing conditions and illnesses. 

Again, many believe the Annual Election Period that runs October 15 – December 7 allows them to change their Medigap plans, but it does not. You can only change your Medicare Advantage and drug plans during this period, not your Medigap plan. Changing Medigap carriers will require underwriting in most cases.

Medicare Supplement: Guaranteed issue rights

Outside of your open enrollment period, an application for a Medicare Supplement would usually have to go through underwriting and could be denied. But there are special circumstances that would require an insurance company to sell you a Medigap policy, cover all of your pre-existing conditions, and cannot charge you a higher premium because of any pre-existing conditions. This is call your “Guaranteed issue rights” and should be heavily considered if you are attempting to enroll into a Medigap plan outside of your open enrollment. 

Guarantee issue right situation example: You’re in a Medicare Advantage Plan, and your plan is leaving Medicare or stops giving care in your area, or you move out of the plan’s service area.

There are more situations that may give you guaranteed issue rights so speak with your AHIC agent if you believe you may qualify or want to learn more. 

Do I really need supplemental insurance with Medicare?

Medicare Supplement insurance is optional. However, with Original Medicare Part A and Part B, you would be responsible for expensive hospital deductibles and copays, outpatient deductibles, and 20% of the cost of ALL outpatients services. Outpatient services include ambulance, surgeries and chemotherapy. Without some form of supplemental Medicare coverage could be devastating. AHIC agents understand that Medicare Supplement plans may be out of reach for some financially. If this is the case for you then you should consider a Medicare Advantage plan. Medicare Advantage has lower premiums, sometimes $0, because you agree to use a local network of providers. 

Get someones on your side:

Still have questions or need assistance with getting a Medigap quote? You are not alone, AHIC is here to help. If you would like someone to walk you through the process of applying for Medicare, shopping for a plan, then please click on the link below. Our services are at NO COST to you and we will be here to help you for the lifetime of your policy. 

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