Medicare Supplement plans cover 14 million Medicare beneficiaries as of 2018. These plans are becoming more commonly known as Medigap plans and include a wide variety of plans depending on the level of insurance coverage you would like to have in place..
Medigap plans are purchased separately in order to fill in the gaps of Original Medicare as these policies help pay for your share of Medicare expenses, such as deductibles and co-insurance.
Medicare supplement insurance plans are standardized by the US Government and are available for purchase nationwide. Because you are staying with Original Medicare with these plans you will have the broadest PPO style plan available on the market.
If you are seeking a plan option that provides you with open access to medical Doctor, outpatient facilities, top cancer centers, and hospitals with little to no copays, deductibles, and co-insurance this is our top recommendation.
These plans will allow you to self refer to any specialist who accepts Original Medicare without being locked into a specific network. Lastly, you will not be denied coverage due to a pre-authorization requirement before a surgery can take place. You will only need for your Doctor to confirm you need to have a medically necessary procedure.
Many individuals who are new to Medicare may not be aware that Original Medicare only covers 80% of your Medicare Part B expenses. As a result you are responsible for the outstanding balance related to your portion of the bill that is equal to 20% of the total medical bill. You can choose a Medicare Supplement that will pay some or all of that 20% for you, among other things. When you couple a MediGap insurance policy with Original Medicare this allows you to have peace of mind by eliminating that cost-sharing responsibility.
In addition a Medigap plan can take care of your Medicare Part A deductible and provide you with broader hospitalization coverage such as additional days you are allowed to stay in the hospital before you are responsible for 100% of the bill.
When is the best time to obtain a Medigap policy? You are highly encouraged to obtain this policy when you first turn 65 or first enroll into Medicare Part B. This is because you are provided with a one-time open enrollment period, in which you are guaranteed the right to purchase a Medicare supplement plan without worrying about any pre-existing conditions. The open enrollment period for this guaranteed right last for 6 months from enrolling into Part A and Part B. There may be some exceptions to this rule in which we can discuss over the phone if you fall outside of this time period.
We believe this is one of the best parts of how a Medicare supplement works. This is because they are nearly invisible in the overall process. What that means is they have no say in what is covered and what is not covered. They simply receive the bill from Medicare and they have to pay their portion of the remainder of the bill.
Frist, your Doctor will provide the medical services and bills Medicare for payment.
Second, Medicare pays their portion of the bill (equals 80% of total approved cost) and send the excess amount to your MediGap Insurance Company.
Lastly, Your MediGap plan pays up to 100% of the remaining cost (remaining 20%) depending on the Medicare Supplement plan you selected minus your annual Part B deductible if not covered by Plan F.
Original Medicare was first introduced in 1966 and was made part of your Social Security benefit. In the early 1980’s private insurance companies introduced Medicare supplement plans which were designed and approved by the US Government in order to fill in the gaps in coverage left behind by Original Medicare. All Medigap plans are regulated by the US Government even though they are sold through private insurance companies. This means that all insurance company that offer Medigap plans are required to provide specific guaranteed level of coverage based on the Plan you are obtaining. Insurance carriers are not allowed to deviate from each plan offered.
When you enroll into Medicare your cost sharing portion for Part A & Part B are broken down into deductibles and copays. In addition Part B has a co-insurance obligation that they include. The co-insurance amount is equal to 20% of the overall cost which means under original Medicare they will pay 80% of the total bill and you are responsible for the remaining 20%. Medicare supplemental policies were created to help offset these cost up to 100%. You also have the option to purchase a plan that provides less coverage for a lower monthly premium. Medigap plans allows us to have a clear expectation of what our medical bills will be when you end up at the Doctor’s office or hospital.
Some of the primary advantages of staying in Original Medicare with a MediGap supplement policy are:
Medigap policies provide our clients with the best in class coverage that are virtually hassle free. We have talked with countless people who have had to fight with their insurance carrier because they would not cover a bill and/or denied coverage that they believed should have been covered. With a Medicare Supplemental insurance policy the insurance carrier has no say in your medical decision process. Once Medicare determines its a covered medical condition / procedure they will pay their portion of the bill and Medicare sends the remaining balance of the bill to the insurance carrier and they are required to pay it no questions asked.
What does this mean to you, this means you have a very predictable insurance coverage that you can buy in which you can trust will not dispute coverage and will simply pay the required amount. You will know exactly what’s covered for every medical procedure no matter what.
Some key takeaways to know about Medigap / Medicare Supplement insurance:
The chart below provides you with a list of all the Medicare supplemental plans available with some restrictions that will be discussed. You can also find this chart in your Medicare and You Handbook located on page 72 of the 2021 handbook. Each Medigap plan provides a different level of coverage depending on the letter plan you choose.
Medigap Plan F offers the riches benefit of all available plans, meaning you would have zero cost when you need to see the doctor or go to the hospital up to the coverage terms and conditions. If you become eligible for Medicare after Jan 1, 2020 this plan is no longer an option for you but will continue to be offered for those individuals who were or are eligible for Medicare prior to Jan 1, 2020.
You do have the option to help keep your monthly premium down by obtain a Medigap Plan F or Plan G that includes a high-deductible plan (HDF). Not all insurance companies have plans that provide you with this reduced benefit, if this is something you are interested in please let us know that so we can exam those specific plans for you. By choosing the high-deductible plan option, you will be required to pay for Medicare-covered costs (coinsurance, copayments, deductibles) up to your annual high deductible amount of $2370 in 2021 before your policy will pay anything.
For Medigap Plans K and L has some pretty hefty cost sharing. Each of these plans share either 50% of the cost or 75% of the cost up to your max annual out-of-pocket limit and your annual Part B deductible (\$203 in 2021). Once you reach both of these max limits your Medigap plan pays 100% of covered services for the rest of that calendar year.
Plan N is a popular plan option as it can provide you with a lower monthly insurance premium as compared to the Plan G and Plan F. While you may save on the monthly premium you will share in more of the cost when you use the benefit. Plan N pays 100% of the Part B coinsurance, except for a copayment that can cost up to $20 for office visits and up to a $50 copayment for emergency room visits that don’t result in an inpatient admission. In addition the Plan N doesn’t cover excess charges which can equal up to a 15% charge from your Doctor that you would be responsible for. The excess charge is one of the main reasons Medicare beneficiaries do not choose this plan as this can add up to thousands of dollars in cost.
Medigap Plan G is the “New Plan F” for those individuals who become eligible for Medicare after Jan 1 2020. What we mean by this is that this is the next most popular plan that Medicare Eligible individuals are selecting. The only difference between Plan G and Plan F is that Plan G doesn’t cover your Part B deductible of $203 for 2021 plan year.
Medicare supplement plans are broken down by their individual letter plan. Each plan letter provides a different level of benefits to you as the Medicare Beneficiary. Like the individual health insurance market (Covered CA) is now broken down by Bronze, Silver, Gold, and Platinum, Medigap plans are broken down by a specific letter such as “Plan G”.
Medicare supplement plans are available across all 50 states. Each plan letter (such as Plan G) will provide a different level of benefits depending the medical services provided. For instance the only difference between Plan F and Plan G is Plan F will cover your Part B deductible. Other than the Part B deductible they both provide the exactly the same benefits.
Medicare supplement plans provide standardized coverage regardless of which insurance company you end up with. For example, Medicare supplement Plan N at Carrier A has the same benefits as Plan N from Carrier B, C, & D. This means the only difference between the plans is your monthly premium. It is important to mention that not all plans are available in each state.
Plan F was the most popular plan as it filled in all of the coverage gaps left behind by Original Medicare to include your Part B deductible. Unfortunately this comes at an increased cost for the insurance carrier to manage this cost on your behalf. Plan G is a plan we will typically recommend over Plan F. This is because the savings in your monthly premiums far outweigh the cost difference between the two plans.
As a Medicare insurance agent / broker who specializes in Medicare supplemental insurance and Medicare Advantage plans for seniors we can help you determine which plan best suits you and your individual needs. The advantage to you is we represent all of the major insurance carriers who offer these types of plans, which allow us to shop the lowest rate for you at no additional cost to you.
If you called Carrier A and they offers you a Plan G for $150 dollars directly, we can get the exact same plan for you at the exact same price. However, as we are an independent insurance Agents we are able to shop all available insurance carriers which may enable us to find you the exact same plan with Carrier B for a lower monthly premium for the exact same coverage. We would love the opportunity to represent and serve you, our clients in all of your Medicare needs.
When it comes to a Medigap policy, we have found that most Medicare beneficiaries choose to enroll into Medicare supplement plans F (if eligible for Medicare Prior to Jan 1, 2020), Plan G or Plan N.
While there are other plans available outside of these three plans, these other plans typically offer less coverage benefits. Plan F, G, & N offer the most comprehensive coverage which is why they are the most popular.
It is important for you to decide how you want your Medigap plan to pay out when you use it. Are you someone who doesn’t mind paying a copay or deductible, which in turn will provide you with a lower monthly premium. Or do you want to pay a little more in your monthly premium so you don’t have to worry about any cost or very little cost when you go to the Doctor or Hospital.
Every person has a different perspective when it comes to health insurance cost. There is no single answer or decision that fits perfectly for everyone.
One thing to consider is today you might be healthy so you might think picking a plan with a high deductible is your best option. It is important to remember as you get older you will become a heavier user. In addition if you want to increase your benefit coverage from Plan L to a Plan G you may be required to go through medical underwriting for approval. Make sure you pick a plan you can afford not only today but tomorrow.
Let one of our Medicare Agent’s help guide you through the process and provide quotes for several plans and see what makes the most sense to you. Our Agents have access to every Medicare Insurance Carrier so we can find the best and lowest cost plan all in a single place.
While you can enroll into a Medigap plan today or even in the future, if you try to enroll into a Medicare supplement plan beyond your Initial Enrollment Period which provides you a period of time to obtain your policy on a guaranteed issue basis, you will need to go through medical underwriting. Depending on your medical conditions you could be declined coverage for a Medigap plan.
How do you enroll into a Medigap plan with guaranteed issue rights? You are given a six month window that either begins on the first day of your 65 birth month, or the month you enroll into your Medicare Part B coverage. After either you pass the six month time period you will be required to go through full underwriting. While this is not impossible for many individuals it can be difficult or impossible for others.
Per your Medicare and You Handbook, they also confirm that the best time to buy a Medicare supplement policy is during your one-time open-enrollment window (See page 73 – When to buy of your 2021 handbook).
During your initial open enrollment period the Medicare supplement insurance company will not ask you any medical condition questions in an attempt to keep you out of the Medigap plan you selected. The only questions you will be asked durning the application process, is your basic contact information and dates of enrollment into Part A and Part B of Medicare.
If you first enroll into Original Medicare without a Medigap plan or you enroll into a Medicare Advantage plan and you later decide you are not happy and want to enroll into a Medigap plan, the Medigap insurance carrier will require full underwriting. This means that they will review any medical condition, prescription drugs, hospital stays and so on in order to decide if they would like to extend coverage to you or not. Unlike Medicare Advantage plans, Medicare supplement plans offered by private insurance companies are not required to provide coverage once you fall outside of your six month guaranteed issue period.
We have great news for you! Once you are enrolled into a Medigap plan, these plans do NOT change from year to year like a Medicare Advantage plan. In addition if you ever move to a new City, County, or State these plans follow you wherever you go without concern of having to reapply. Lastly, you do not have to make any changes to your Medigap plan nor do these plans have an annual open enrollment period. The only thing you need to review from October 15 to December 7th of each year is your Part D prescription drug benefits.
Medicare supplement policies only provide guaranteed issue rights within a small six month window. Your six month window either begins on the first day of your 65 birth month, or the month you enroll into your Medicare Part B coverage.
Why do some Medicare beneficiaries delay their enrollment into Part B coverage? If you continue to work and your employer provides with you creditable health insurance coverage, then you can delay your Part B enrollment. Once you decide to retire or lose your group health coverage, you have the right to purchase certain Medigap policies and Part D prescription drug coverage. Each of these two coverages have specific time periods to enroll, so please make sure you plan ahead so you avoid penalties and/or delays in coverage.
During your guaranteed issue window, you will be given the opportunity to enroll into specific Medigap plans & Part D coverage that work best for you. The insurance company you sign up with for your Medicare Supplement plan is not able to deny your application for any health related issues during your guaranteed issue period.
There are some other circumstances which can create what the insurance companies call a Special Enrollment Period. During these special enrollment period they can expend a guaranteed issue window that falls outside of the normal six month period.
The following are some examples of an event that could create a special enrollment period to be given a new guaranteed issue right.
Every State has their own version of your Guaranteed issue rights, so be sure to check with one of our licensed Medicare Insurance Agents who can do the needed research and let you know if there is a specific guideline that you might fit into.
It is important that you obtain and keep all notices received from your employer and current insurance company so you are able to prove you qualify for your guaranteed issue rights. These documents should show when you first enrolled into your health plan and when coverage will end. In addition for your employer notice, It is important that they specify when your insurance coverage will end on their company letterhead.