medicare supplement insurance is intended to limit unpleasant surprises of health care costs. your health at age 65 may not be an indicator of what is to come a few years later. you could get sick and face medical bills that devastate years of planning and preparation. Combine this with the fixed income that so many seniors find themselves on, and you can see why having more security with health bills can make sense.
choosing medicare supplemental insurance can help. may cover up to 100% of out-of-pocket expenses, depending on the plan.
one in three original medicare beneficiaries (more than 13 million seniors) has chosen to do so.1
choose my type of medicare coverage
your first decision regarding health coverage after age 65 is between original medicare and medicare part c.
Original Medicare covers most medical and hospital expenses. (Does not cover prescription drugs, although you can purchase private drug plans separately.) the balance is left to you, with no limit on out-of-pocket costs.
original medicare lets you see any doctor in the us. uu. who accepts medicare. Provides excellent flexibility – no networking or referral requirements.
medicare part c (or medicare advantage) includes hospital, doctor and drug coverage. covers most of those expenses, but you pay deductibles, copays, and coinsurance. Medicare Advantage plans limit out-of-pocket costs.
medicare advantage is all-encompassing, even offering dental and vision coverage (original medicare doesn’t). but you are limited to your network of doctors and need referrals to see specialists.
what is medicare supplemental insurance?
Original Medicare does not cover all costs. medicare supplemental insurance, or medigap, may cover what medicare doesn’t cover. private insurance companies, vetted by the federal government, offer it to help manage out-of-pocket costs. these policies do not add coverage. Instead, they help pay for what Medicare Parts A and B don’t cover, including copays, coinsurance, and deductibles.2 It doesn’t affect which doctors you can see.
To understand the value of a medicare supplemental plan, you need to understand what original medicare does and doesn’t cover.
Original Medicare is made up of Part A (Hospital Insurance) and Part B (Medical Insurance).
Part A has a deductible that must be paid before hospitalization benefits kick in. Covers the first 60 days of Medicare-eligible hospital care in a benefit period. after that, you pay daily coinsurance amounts, based on the length of your stay.
Part B also has an annual deductible. Once you reach it, Part B covers 80% of eligible expenses related to the doctor, tests, and medical equipment. you are responsible for the balance (or coinsurance).
in 2021, the part a inpatient hospital deductible is $1,484 per benefit period and the annual part b deductible is $233.3
medicare supplement insurance is designed to help cover these out-of-pocket deductibles and coinsurance.
how does medigap help me?
See also: Healthcare – The White House
Medicare coverage lasts for the rest of your life. As you age, doctor visits and hospital stays can increase. but it is impossible to project your future health care needs.
Medigap policies work hand in hand with Original Medicare to limit your exposure to unexpected out-of-pocket medical expenses. you decide how much you want to be covered and what premium you want to pay.
do i have to get medigap?
are you required to get a medicare supplemental plan? No.
should you? that’s a decision you have to make when considering your medical needs and your budget.
how does medigap work?
To buy a Medigap policy, you must enroll in Medicare Parts A and B.
Medicare coordinates billing and claims between original medicare and your medicare supplemental plan. (rarely files claims).
The provider bills medicare first, then bills your medigap plan. Depending on the plan, the provider then bills you for the remainder, such as the Part B deductible, and your check goes to the provider.
You can renew your medigap policy as long as you pay the premium. the insurer cannot use your health problems to cancel your policy or increase your premium.
there are differences from state to state in some warranties and limitations.
what are my medigap policy options?
the federal government has standardized medicare supplemental plans. you get the same coverage no matter which insurance company sells you the medigap plan. premiums for the same policy may vary between insurance companies. but only the price quoted and the reputation of the insurer will change.
There are ten separate plans, labeled a through n. two plans, c and f, are no longer offered to newly eligible beneficiaries. You can find the specific benefits covered by each plan in this comparison chart.
once you decide how much coverage you want, you can check online or contact an insurance agent or broker for quotes.
what do medicare supplemental plans cover?
medigap policies cover the following out-of-pocket costs:4
- partial coinsurance and hospital costs up to an additional 365 days after medicare benefits are exhausted.
- part b coinsurance or copays.
- blood (first 3 pints).
- part of hospice coinsurance or copays.
- coinsurance for skilled nursing facility care.
- part of a deductible.
- part b deductible.
- part b excess charge.
- Foreign travel emergency (up to plan limits).
- above the out-of-pocket limits.
- freedom of widespread acceptance in the us. uu.
- an unlimited selection of doctors.
- no nets.
- no mandatory references.
the part b surcharge is poorly understood but essential to know. Physicians who accept Medicare assignment accept Medicare’s established rates for covered services. those who cannot charge up to 15% more than the Medicare-approved amount.
Unless you have a medigap plan that covers excess charges, you will be responsible for those charges. the alternative? use only participating doctors, although that’s not always easy in an emergency or surgery involving many doctors.
plus, original medicare doesn’t cover you outside of the us. uu. but some medigap policies do.
what don’t medicare supplemental plans cover?
medigap policies do not extend coverage beyond original medicare.
For example, they don’t cover dental and vision care, hearing aids, and non-skilled home care.
Except for plans written before 2006, medigap also does not cover prescription drugs. Separate plans, called Medicare Part D, are available through private insurers approved by the federal government. (Most Medicare Advantage plans cover prescription drugs.)
Finally, medigap does not cover private duty nursing or long-term care. such coverage would have to come from a separate long-term care insurance policy.
why is medigap good for consumers?
original medicare is the best option if you want to:
But, to minimize your out-of-pocket exposure, you may want a medigap policy.
how do I sign up?
You can buy a medigap policy from any insurer that is licensed to sell it in your state. But an insurer can’t sell you a medigap policy if you have the medicare advantage unless you’re in the process of going back to original medicare.
Also, not all insurers offer all plans in all states. you can find the ones available in your state on the medicare website.
when can i sign up?
the medigap open enrollment period covers six months. begins the month you are age 65 or older and enrolled in medicare part b. During this period, no insurer offering supplemental insurance in her state can deny her coverage or increase her premium due to medical conditions. at any other time, you would have to qualify for a special enrollment period to have the same rights.
Except in a few states, if you apply outside of this period, the insurance company will “insure” you. the insurer could then exclude, reject, or charge more for a policy because of your existing health conditions. Again, with the exception of some states, this also happens if you change from one medigap plan to another later.
how do I pay?
You pay the premium for your selected Medicare Supplement plan directly to the private insurance company. This is in addition to the monthly Part B premium you pay to Medicare (likely a deduction from your Social Security check).
Original Medicare may not be the cheapest solution for health care coverage after age 65. Both types cover Medicare services. Advantage plans may add optional benefits not covered by Original Medicare. Original Medicare also has unlimited out-of-pocket costs. original medicare appeals to someone who wants the freedom to choose almost any doctor anywhere in the us. uu. and no referral requirements for specialists.
Medicare Advantage Combined coverage includes additional services, but has annual out-of-pocket costs of up to $7,500 in 2021.
When you add medigap to original medicare, you have monthly premiums that are generally more than a medicare advantage plan. however, once the premium is paid, your out-of-pocket costs are predictable and no longer capped.
The various medigap policies allow you to cover as much or as little of your out-of-pocket costs as you want. Together with Original Medicare, they are a compelling solution for lifetime health care coverage.