While it is essential to have comprehensive health insurance, fees can be concerning. Monthly premiums, copays, and coinsurance can all add up. However, for Medicare members, there are potential solutions to lessen high pocket costs.
Medicare Supplement plans, also known as Medigap, can be an effective method to cover costly medical expenses. With proper information, you can better understand what the supplemental is and the benefits it can have. In this article, we will discuss everything you need to know about Medigap, and answer the question “Do I really need supplemental insurance with Medicare?:
What is Medicare Supplemental Insurance (Medigap)?
Unlike Medicare, which is federally administered, Medigap is offered through private insurance companies. It is important to note that you must be enrolled in Original Medicare Part A and Part B to be eligible for Medicare Supplemental Insurance. As the name implies, Medigap is meant to fill in the gaps that Original Medicare does not cover.
In particular, Medigap can help cover pocket expenses such as copayments, coinsurance, and yearly deductibles. Typically, it will not provide coverage for long-term care. While Medicare only has 4 parts, Medigap offers 10 different plans.
Medicare Advantage and Medicare Supplement Plans do have certain similarities. Both are sold by Medicare-approved private insurance companies. In addition, both aim to ease pocket costs from expensive medical bills. However, there are key differences.
Medigap provides more predictable expenses like monthly premiums. Furthermore, depending on your place of residence, Medigap may offer a wider range of coverage accessibility. On the other end, Medicare Advantage provides prescription drug coverage while Medigap policies don’t. To receive prescription drug coverage with Medigap, you must enroll in Medicare Part D.
2 Reasons Why You Need Supplemental Insurance
Supplemental Insurance has a plethora of benefits. It’s a great option for self-employed individuals or retirees who no longer receive employer-sponsored insurance. To better understand fees like monthly premiums, you can receive a quote online. In total, Medigap is an effective way to receive greater health coverage while lowering pocket expenses.
More Health Coverage
Medigap expands on Original Medicare and provides additional coverage. For example, you are allowed to visit any primary care provider that accepts Medicare. Furthermore, you do not need a referral to visit a specialist. This type of health insurance plan is most beneficial for those who want flexibility in their coverage.
In addition, if you are a frequent traveler, Medigap may be right for you as these supplemental insurance plans offer nationwide coverage. Under this option, you are not limited to care providers and healthcare facilities in your local area. However, it is important to note that Medigap plans do not offer prescription drug coverage. You need to sign up for a Medicare Part D prescription drug coverage plan to receive those benefits.
Save You From High Out-of-Pocket Medical Expenses
While you are required to pay monthly premiums, a Medigap plan can lower pocket expenses. Since these plans are sold through private insurance companies, your monthly premiums may vary. It can be beneficial to speak with a licensed insurance agent as they can answer any questions or concerns you may have.
Although long-term care benefits are not offered by Medigap policies, they can significantly lessen pocket costs from Original Medicare. In particular, these plans provide coverage for deductibles, copayments, and coinsurance. When considering Medigap, you should take into account your medical history and circumstances. Medicare supplemental insurance plans can be quite beneficial for those who require more frequent and intensive medical care. If the additional costs of Medigap lower your overall out-of-pocket costs, it is worth getting.
What Medigap Policies Cover
As previously stated, there are ten different available Medigap plans. Each has different coverage options. In the table below, we will compare the different Medigap plans.
For clarification, “Yes” means that the plan covers 100% of the benefit. “No” means that it does not cover that benefit at all.
Medigap Benefits | Plan B | Plan C | Plan D | Plan F | Plan G | Plan K | Plan L | Plan M | Plan N | |
Part A Coinsurance and Hospital costs up to an additional 365 days after Medicare benefits are used up |
Yes |
Yes |
Yes |
Yes |
Yes |
Yes |
Yes |
Yes |
Yes |
Yes |
Part A hospice care coinsurance or copayment |
Yes |
Yes |
Yes |
Yes |
Yes |
Yes |
Yes |
Yes |
Yes |
Yes |
Part A deductible | No | Yes | Yes | Yes | Yes | Yes | 50% | 75% | 50% | Yes |
Part B coinsurance or copayment | Yes | Yes | Yes | Yes | Yes | Yes | 50% | 75% | Yes | Yes |
Part B deductible | No | No | Yes | No | Yes | No | No | No | No | No |
Part B excess charge | No | No | No | No | Yes | Yes | No | No | No | No |
Skilled nursing facility care coinsurance | No | No | Yes | Yes | Yes | Yes | 50% | 75% | Yes | Yes |
Blood (First 3 pints) | Yes | Yes | Yes | Yes | Yes | Yes | 50% | 75% | Yes | Yes |
Out of Pocket Expenses Limit | N/A | N/A | N/A | N/A | N/A | N/A | $6,940 in 2023 | $3,470in 2023 | N/A | N/A |
Foreign Travel Exchange (Up to plan limits) | No | No | 80% | 80% | 80% | 80% | No | No | 80% | 80% |
It should be noted that Medigap policies do not provide coverage for long-term care, dental care, or prescription drug coverage. In addition, after reaching your limit for Medicare Part B pocket costs, Medigap Plans K and L will fully pay for all covered medical expenses. Furthermore, depending on the state you live in, Medigap Plans F and G offer high-deductible plans. Under this option, you will pay a lower monthly premium but have a higher yearly deductible. If you do not require frequent doctor visits, these types of plans can be quite beneficial.
Eligibility For Supplemental Insurance With Medicare
To begin, these supplement plans are only available for Original Medicare members. If you are enrolled in Medicare Part C (Medicare Advantage), you are not eligible for Medigap until you cease Medicare Advantage coverage. It’s important to note that as of January 1st, 2020, Medigap Plan C and Plan F are no longer available for newly eligible Medicare members. If you were Medicare eligible prior to January 1st, 2020 those plans are still available.
Typically, it is best to enroll in Medigap once you turn 65 years old. You must send an application to your choice of Medicare-approved private insurance companies. There is a six-month Open Enrollment Period. During this time, you cannot be denied coverage even with pre-existing health conditions. If you fail to enroll within the open enrollment period, you may be subject to higher fees. In certain instances, the private insurance company may refuse to sell a Medigap plan if you have a pre-existing medical condition.
How Much Will Supplemental Insurance (Medigap) Cost?
As it relates to cost, there are three policy pricing methods. They are: community-rated, issue-age-rated, and attained-age-rated. Depending on your state of residence, different methods may be implemented. Therefore, it is essential to understand what these pricing policies mean and how they can impact your monthly costs.
Community-rated means that age is not factored in when determining monthly premiums. Typically, everyone will be charged the same.
Moving on, issue-age-rated policies determine your monthly fees based on when you first enrolled. For example, an individual who signed up for Medigap at 65 will pay less than someone who signed up at 70.
Finally, attained-age-rated means that your monthly premium will increase each year. Individuals who begin their coverage at an older age will typically pay higher initial costs.
Since they are sold by private insurance companies, Medigap plans can vary in price. In fact, the same plan can be offered at two different prices. You should consider working with a licensed insurance agent. They have the experience and knowledge to help you understand different Medigap plans and their potential costs.
Frequently Asked Questions
Is there a Medicare supplement that covers everything?
Unfortunately, there is no singular Medicare supplement plan that covers everything. Each has its own benefits and coverage options.
What’s the difference between a Medicare supplement plan and Medicare?
Medicare is your primary health insurance plan. They will provide coverage for hospital and medical bills. A Medicare supplement plan, like Medigap, helps pay for out-of-pocket costs.
What is the highest-rated Medicare supplement company?
As stated by Investopedia, Blue Cross Blue Shield offers the highest-rated Medigap plan types.
What is the downside to Medicare supplement plans?
You are required to pay monthly premiums for Medicare supplement plans. Also, prescription drug coverage and long-term care are typically not provided.
What is the best Medicare Supplement insurance policy?
Generally, Medigap Plans F and G offer the most comprehensive coverage. However, after January 1st, 2020, Plan F is no longer available for new Medigap members. Therefore, Plan G provides extensive benefits for new and long-time members.
Here’s How You Can Learn More
To schedule an appointment with Health Plans of NC, please call us at 800-797-0327. Our office is open Mondays to Fridays from 8 AM to 5 PM. We look forward to helping you find the right Medicare supplemental insurance plan.