Medicare plans from private insurance companies fall into three groups: Medicare Advantage plans, Prescription plans, and Medicare Supplement Insurance. This blog is about Medicare Supplement Insurance. For people who do not want a Medicare Advantage plan, Medicare Supplement Insurance helps to offset the costs of Original Medicare.** For this reason, Medicare Supplement Insurance is also called Medigap.
How does Medigap help to cover costs?
Let’s say your admitted as an inpatient to an acute care hospital. Medicare will bill you $1,600 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, your share is typically manageable. For emergency room visits, ambulance, diagnostic radiology, and outpatient surgery, 20% can be expensive.
With a Supplement (Medigap) Plan
The Part A deductible is $1,600. Your Medicare Supplement plan pays this. You pay $0.
Your CT scan costs $3,000.00. Your share is $600.00. Your Medicare Supplement plan pays this. You pay $0.
Your outpatient surgery costs $8,000.00. Your share is $1,600.00. Your Medicare Supplement plan pays this. 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 with each other 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, as you would with Medicare Advantage. You can use these plans for all kinds of medical care. Think of Medigap as a passport for routine, emergency and comprehensive care across the United States and its territories. The only restriction is that your provider (doctor, facility, medical company) must accept Medicare.
What are the tradeoffs?
Monthly premiums can cost over $100.00. Medicare Supplement plans do not include medications. You will need to enroll in a separate prescription plan. While some Medigap plans may include value added benefits, such as a dental discount plan, or health club memberships, they do not offer the extensive number of extra benefits built into Medicare Advantage plans. Medicare Supplement plans are typically medically underwritten (see below).
When is the best time to enroll in a Medicare Supplement plan?
Under federal law, you have a six-month open enrollment period that begins the month you are 65 or older and enrolled in Medicare Part B. During your open enrollment period, insurance companies must sell you a policy at the best available rate regardless of your health status. They cannot deny you coverage. If you miss your open enrollment period, you can also purchase Medicare Supplement Insurance if you have a guaranteed issue right. Companies must sell you a Medigap policy at the best available rate regardless of your health status. They cannot deny you coverage. Apart from the open enrollment period, and guaranteed issue right, Medicare Supplement plans are medically underwritten. You may also have to wait for your Medigap policy to start due to a pre-existing condition.
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 [email protected], or fill out a contact form on this website.
