Medigap or Medicare Supplement Plans

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Affordable Medicare Supplement Plans

Sold by private health insurance companies, medicare supplement insurance plans help to pay some of the health care costs that government-funded original Medicare doesn’t cover such as deductibles, coinsurance and copayments. The Medigap policy is identified as Medicare Supplement Insurance and in most of the U.S. states there are ten different Medigap plans to choose from. Medicare supplement plans provide additional coverage to fill the gap between Medicare and your actual medical expenses. These plans are labeled as A, B, C, D, F, G, K, L, M, and N. If you buy a Medigap policy and also have Original Medicare then Medicare will pay its share of the Medicare-approved amount for covered health care costs and then the Medigap policy will pays its share. If you have a Medicare Advantage plan then no one can sell you a Medigap policy unless you switch back to Original Medicare. Some of the supplement plans also cover services that original Medicare doesn’t cover like medical care when traveling outside the U.S.

Company in Massachusetts, Minnesota and Wisconsin provide plans with innovative benefits and here the Medigap policies are standardized in a different way. You can avail Medigap plans only if you have Original Medicare, as these plans help you pay for out-of-pocket costs under medicare Part A and Part B, and these do not include benefits of Medicare Part C, Part D or any other private health insurance. Since, Medigap insurance plans are regulated by state and federal laws, the basic benefits offered by each supplement plan are usually the same regardless of the insurer with the only difference being in the price. Every insurer may not offer all types of plan and so you need to carefully choose a health insurer to whom you can show your trust and shop around for the best prices.   

Medigap Coverage

Medicare supplement plans do not work like health insurance plans and instead of covering health benefits these plans cover the cost which you are liable to pay with Original Medicare like deductibles, coinsurance, hospital costs and skilled nursing facility costs after your Medicare covered days.   

Private companies sell these so-called “Medigap” policies, which are typically used to cover expenses like deductibles and co-pays.

Coverage can be difficult to understand, and varies by market. Massachusetts, Minnesota, and Wisconsin provide their own policies for residents. The remaining 47 states in the U.S. rely on 11 standard plans that accommodate all types of health, lifestyle, and budget demands. These plans vary based coinsurance needs such as hospital stay, hospice care, travel expectations and more.

All the Medigap ten plans provide coverage for Medicare Part A coinsurance and hospital costs up to 365 days after Medicare benefits are used up.

Except Medigap K and L plans all the other Medigap plans provide coverage for Medicare Part B coinsurance or copayment.  Medigap Plan K provides 50% and Plan L provides 75% Medicare Part B coinsurance or copayment.

All the Medigap plans except ‘K’ and ‘L’ provide coverage for first three pints of blood. Plan ‘K’ provides 50% and Plan ‘L’ provides 75% coverage for first three pints of blood.

All the Medigap plans except ‘K’ and ‘L’ provide coinsurance or copayment for Part ‘A’ hospice care. Plan ‘K’ provides 50% and Plan ‘L’ provides 75% coinsurance or copayment for Part ‘A’ hospice care.    

Skilled nursing facility care coinsurance is covered by Medigap plans ‘C’, ‘D’, ‘F’, ‘G’, ‘M’ and ‘N‘ and Plan ‘K’ provides 50% and Plan ‘L’ provides 75% coinsurance for skilled nursing facility care.

Part ‘A’ deductible is covered by Medigap Plan ‘B’, ‘C’, ‘D’, ‘F’, ‘G’, ‘N’. Medigap Plan ‘K’ provides 50%, ‘L’ provides 75% Part and ‘M’ provides 50% Medicare Part A deductible amount.

Part B deductible is covered by only Medigap Plan ‘C’ and ‘F’.

Part B excess charge is covered by only Medigap Plan ‘F’ and ‘G’.

Foreign  travel exchange is covered up to 80% of plan limit by Medigap plans ‘C’, ‘D’, ‘F’, ‘G’, ‘M’ and ‘N’.

Medigap Plan ‘K’ have $5,560 as out-of-pocket limit and Plan ‘L’ have $2,780 as out-of-pocket limit.

Factors that Decide Medigap Plans Prices

The Medigap policy price varies with each insurance company and generally there are three ways in which insurance companies set price for the Medigap plans.

Cummunity-rated Pricing – In this pricing way, enrollees are charged with the same premium irrespective of their age, like a 65 year enrollee will pay the same premium as 85 year enrollee. Even if there is any change in the rpemium amount then also they change by the same amount for all enrollee. Eight states in the U.S. require all Medigap plans to be community rated.

Issue-age Rated – In this was the premiums are based on the purchaser’s age. Older enrollee will have to pay higher premium and so you should get enrolled as soon as you become eligible for the Medigap coverage because premium will be low at that time.

Attained-age Rated – In this way the premium amount shoot up as the insured personages and so these plans are least expensive when you first become eligible but as you get older the price will increase based on your age and also due to other factors like inflation and overall medical cost trends.    

Vital Facts Related to Medigap Policies

  • In order to have Medigap or Medicare supplement policies, you must have medicare Part A and Part B.
  • Medicare supplement plan is different from a Medicare Advantage Plan, as Advantage plans are ways to get medicare benefits while Medigap only supplements the Original Medicare benefits.
  • To obtain Medigap policy you need to pay a monthly premium to insurance company, which is paid in addition to the monthly Part B premium that you pay to Medicare.  
  • Medigap policy covers only one person and if you want coverage for your spouse too then you’ll each have to buy separate policies.
  • Medicare supplement policy can be bought from any private company that has licensed in your state to sell.
  • Any standard Medicare supplement policy is guaranteed renewable if you suffer any health problems. Insurance company cannot cancel your Medigap policy as long as you pay the premium.
  • Medicare Supplement policies usually do not cover long term care like vision or dental care, hearing aids, eye glasses or private duty nursing care.

Medicare Supplement Insurance Plan Basic Benefits

Seniors who are on Medicare very well know that it does not provide all the health insurance coverage they need so the requirement of Medicare supplement plan is felt. There are ten standard Medigap plans of gap coverage which you can purchase to supplement the medical expenses that will not be covered by Medicare. Unfortunately Medicare supplement plans are not free but in the long run you will be able to save a lot of money from your out of pocket if you carefully purchase some of the Medicare supplement plans.

Benefits of each of the standard Medicare supplement plans include:

Part A – Part A supplement plan provides coinsurance and hospital costs benefits that proves great for the worst-case-scenario hospital stays. Under Medicare Part A, hospital stay after 60 days and until 90 days will cost you coinsurance payments and after 90 days are far more expensive. Thus to help in this scenario Medigap Part A coinsurance and hospital benefit remedies the high costs. This plan kicks up for a full one year and can help you bear the hospital costs once your Original Medicare benefits are used up.   

Part A Hospice Care Coinsurance/Copayment – Though hospice care is covered by Medicare Part A but you need to pay a few copayments. Whereas in Medigap Part A hospice care copayment coverage, all the copayments costs are taken care of, so the hospice would be completely free for you.

Part B Coinsurance/Copayment – Doctors and health care providers charge you coinsurance and copayments under the Part B umbrella and this amount is bear by the Medigap Part B plan.  

Blood Pints – Under Original Medicare, you pay for every pint of blood until you receive four pints in a calendar year whereas in Medigap plans you are covered for the first three pints you receive in a year.  

Skilled Nursing Care Coinsurance – Skilled nursing care treatment includes physical therapy, audiology, occupational therapy and others that are offered by skilled nursing or therapy staff. Though Original Medicare covers treatment from skilled nursing facility but only till 20 days after which you need to pay daily coinsurance fees. However these fees are completely covered if you purchase a Medigap plan that comes with skilled nursing facility care coinsurance benefit.

Part A Deductible – Medicare Part A covers your hospital expense for the first 60 days after you pay your deductible amount. However, with Medigap Plan A you get completely covered for deductible amount.  

Part B Deductible – Medigap Plan F and Plan C cover your deductible amount that you need to pay for medicare approved Part B service. With this deductible covered you can visit the doctor without need to pay any up-front cost. This benefit is slightly controversial and so Congress will not allow Medigap Plan F and Plan C to be sold after January 1, 2020. Though, anyone who already had either of these plans before can continue with it.

Part B Excess Charge – Visiting a doctor who doesn’t accept Medicare assignment can prove costly for you, as the doctor can legally overcharge you for the service. But with Medigap Part B excess charge benefit the excess charges are paid by the insurance carrier.

Foreign Travel Coverage – Foreign travel coverage is am important benefit offered by Medicare supplement plans that is not covered by the Original Medicare that cover for emergency services outside the U.S.

Out-of-pocket Limit – This limit is applicable only with Medigap Plans K and L that pays 100% of your covered services until the year end when you reach your Part B deductible and the out-of-pocket limit for your plan.

Medicare Supplement Insurance Plan Enrollment and Eligibility

In order to become eligible for a medicare Supplement Insurance plan, you need to first enroll in Medicare Part A and Part B. The other most important requirement to obtain Medicare supplement plans is the age. As per the Federal law, in most of the states insurance companies cannot sell supplement insurance plans to people under 65 years of age. However in some states insurance companies are require to offer at least one kind of Medicare supplement insurance plan to people under 65 having Medicare plan.

Medicare Supplement insurance plan eligibility for people under 65

Though insurance companies are not federally mandated to sell medicare supplement insurance plans to people under 65 but still they may voluntarily sell at higher cost by using medical underwriting. It means that any health condition will result in the increase of the premium amount.

Medicare Supplement insurance plan eligibility for people over 65

If you are 65 or older, you will be able to purchase Medicare supplement insurance plan during the Medicare supplement open enrollment period. This period lasts for six months beginning on the first day of the month in which you turn 65 and the month in which you enrolled in medicare Part B. This is the best time to buy the plans as during this period insurance companies cannot turn down your plan request or can charged you more because of your health conditions. After the open enrollment period you may not be able to buy a Medigap policy and even if you are able to buy then it might cost more.

Enrollment in a Medicare Supplement Plan outside your Open Enrollment Period

If your want to have Medicare supplement plan and you are outside your open enrollment period then you may be able to enroll in a supplement plan if you have guaranteed issue rights. Having guaranteed issue rights ensure that a plan can’t deny you coverage or refuse to cover yous any pre-existing conditions or make you wait for coverage. Situations in which you qualify for guaranteed issue rights are:

  • If you drop your Medicare supplement plan for trying Medicare Advantage plan and you want to switch back in less than a year, you qualify for guaranteed issue.
  • If your Medicare Supplement Insurance plan provider went bankrupt, committed fraud or mislead you
  • If your Medicare Advantage plan no longer provide coverage in your area
  • If you move out from your plan’s service area

Best Insurance Companies offering Medicare Supplement Insurance Plans

Some of the best and reputed health insurance companies that offer Medicare Supplement insurance plans include:

Changes in Medigap

There is slight changes in the Medicare supplement plans according to Medicare.gov in 2019:

  • Medigap Plan F will no longer be available from the end of 2019
  • In place of Plan F you can opt for Plan G now as both the plans are basically same except for the deductible.

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