Medicare plans from private insurance companies fall into three groups: Medicare Advantage plans, Stand-alone Prescription plans, and Medicare Supplement Insurance. For people who do not want a Medicare Advantage plan, Medicare Supplement Insurance helps to offset the costs of Original Medicare.** Medicare Supplement Insurance is also called Medigap.
How does Medigap help to cover costs? Suppose you are admitted as an inpatient to an acute care hospital. Medicare will bill $1,676 per benefit period. This is your Part A deductible. For outpatient services (Part B), Medicare pays 80% of the cost. Your share is 20%. For physician visits, this is typically manageable. For other kinds of outpatient treatment such as ER visits, ambulance transport, radiological tests, and surgery at an ambulatory center, 20% can be expensive.
With a Medicare Supplement (Medigap) Plan:
The Part A deductible is $1,676. You pay $0 because you have Medicare Supplement Insurance.
Your CT scan costs $3,000.00. Your share is $600.00. You pay $0.
Your outpatient surgery costs $8,000.00. Your share is $1,600.00. You pay $0.
Medigap plans are designated by letter (Plan N, Plan G, Plan K and so on). Plan benefits are the same, regardless of where you live in the county. Insurance companies compete based on premium costs, customer service, and value-added benefits.
Since Medigap is designed to supplement Original Medicare, there are no provider networks to navigate. Medicare Supplement Insurance acts as a passport for routine, emergency and comprehensive care across the United States and U.S. territories. The only restriction is that your provider (doctor, facility, medical company) must accept Medicare.
What are the tradeoffs?
Monthly premiums can be expensive. You will need to enroll in a separate prescription plan. While some Medigap plans offer value added benefits, such as a vision discount plan, or health club memberships, they do not offer the extensive number of extra benefits built into Medicare Advantage plans. Finally, Medicare Supplement plans are typically medically underwritten.
Is it possible to purchase Medicare Supplement Insurance without medical underwriting?
Yes. You have a six-month open enrollment period that begins the month you are 65 or older and enrolled in Medicare Part B. Insurance companies must sell you a policy at the best available rate regardless of your health status. They cannot deny you coverage. Certain situations may allow you to enroll in Medicare Supplement Insurance without medical underwriting. For example, if you drop your Medigap plan to enroll in a Medicare Advantage plan for the first time and decide, in less than a year, that it’s not for you, you can switch back to Medicare Supplement Insurance. If you declined Medicare Part B because you had employer insurance and, upon retirement, enroll in Part B, you have a six month window to enroll in a Medicare Supplement plan.
Can I have a Medigap plan and Medicare Advantage plan at the same time?
No. It is illegal for you to have both plans at the same time.
Is a Medigap plan for you? One way to answer that question is to ask what’s most important. Is it the cost of the plan or access to medical services?
*This site is not affiliated with or endorsed by any government agency.
**Original Medicare is the public portion of the Medicare health system. It’s comprised of Parts A and B, found on your (red, white and blue) Medicare identification card. To find out what Parts A and B include, please read ‘Medicare’ under the Services tab, and my blog, ‘Original Medicare Costs for 2023.’
If you want to learn more about Medicare Supplement Insurance, including guaranteed issue rights, call 725-227-6795, email ken@deserthealthandlife.com, or fill out a contact form on this website.
