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Medicare Supplement Insurance Plans

 

If you’re concerned about Medicare costs, a Medicare Supplement health insurance policy (also called Medigap insurance or a MedSupp plan) helps pay the “gap” between what Original Medicare (Medicare Parts A and B) pays and what you pay out of your own pocket. You can get a Medicare Supplement policy through private insurance companies.

 

What you should know about Medigap

The Medigap policy you purchase must be clearly identified as “Medicare Supplement Insurance.” There are 10 different Medigap basic benefits options to choose from. Medicare standardizes these 10 options. Plans are labeled A, B, C, D, F, G, K, L, M, and N (Plans E, H, I, and J are no longer available to be purchased). Plans with additional benefits, like vision or fitness benefits, may be available and differ from company to company.

All insurance companies selling a particular Medigap plan type in your area must offer the same basic benefits, but may offer it at different prices. So, you may want to shop for the best price. For example, this means that every Plan G offers the same exact benefits. So you want to make sure when you shop for a plan you are shopping for both a reputable insurance company and the best price.

You can get a Medicare Supplement insurance plan only if you already have Original Medicare. Medigap may help pay for out-of-pocket costs under Medicare Part A (hospital insurance) and Medicare Part B (medical insurance), but it does not cover Medicare Part C (Medicare Advantage plans), Medicare Part D (Prescription Drug Plans), or any other private health insurance, Medicaid, Veterans’ Administration benefits, or TRICARE.

Because Medigap policies are regulated by state and federal laws, the benefits for all the basic benefits options are thesame regardless of insurer. The differences will be in the price, who administers the plan, and which of the 10 options the insurer chooses to offer. Choose a health insurer you trust, and shop around for the best prices.

Residents of certain states, including Massachusetts, Minnesota, Texas, and Wisconsin, also have the option to buy a Medicare SELECT policy. If you choose this type of Medicare Supplement insurance plan, then you will have to use a specific network of doctors and hospitals.

Open Enrollment Period for Medicare Supplement insurance plans

Your Medigap Open Enrollment Period begins the first day of the month in which you turn 65 and are covered under Medicare Part B. You have six months to enroll. If you are under 65, check with your state’s Social Security Administration to see if it offers additional open enrollment periods.

Be aware that Medigap plans supplement Original Medicare to fill in cost gaps. If you are considering a Medicare Advantage plan, you can’t use a Medigap plan in conjunction with a Medicare Advantage plan.

 

IMPORTANT! As long as you enroll during this six-month Medigap Open Enrollment Period, the insurance company cannot refuse to sell you a Medigap policy, charge you more because you have health problems, or make you wait for basic benefits to begin.

If you enroll in a Medicare Supplement insurance plan outside of your Medigap Open Enrollment Period, the private insurance company may “underwrite” the plan. This means you may be subject to a physical, and the insurance company can refuse to sell you the plan or they can charge you a higher premium based on your health status.

If you enroll into a Medicare Advantage plan, you are not allowed to use and cannot be sold a Medigap policy. However, if you later return to Original Medicare, Parts A and B, within your first year of joining a Medicare Advantage plan, you may have a special right to sign up for a Medigap Supplement insurance plan. See Medicare Supplement plans

How insurance companies set Medigap premiums

There are three ways an insurance company can set Medigap premium rates:

  • Community-rated” (or “no-age-rated”) premiums are the same for everyone, regardless of age.
  • Issue-age-rated” (or “entry-age-rated”) premiums are based on your age when you first buy the policy. The sooner you enroll, the less you will pay.
  • Attained-age-rated” premiums are based on your current age, meaning the premium increases as you grow older.

Other factors impacting the premium rates can include inflation, geography, medical underwriting (if you did not enroll when first eligible), and other discounts. Many carriers offer household discounts. Eligibility for a household discount very from plan to plan. Consult with an agent to see if you may be eligible.