Comparing Medicare Supplement Insurance Plans
Many out-of-pocket costs are not covered by Original Medicare, such as deductibles, copays, and coinsurance. A Medicare Supplement Insurance Plan (Medigap policy) is a health insurance sold by private insurance companies that can help pay for some of the health care costs that Original Medicare does not cover. Medicare supplements are designed to do exactly what the name says. Medicare supplement insurance plans come in and “supplement”, or fill in the gaps in Original Medicare.
The best time to purchase a Medicare Supplement insurance plan is during your Medicare Supplement Open Enrollment Period. This period lasts for 6 months and begins on the first day of the month in which you’re both 65 or older and enrolled in Medicare Part B. Some states have additional Open Enrollment Periods including those for people under 65. During this period, an insurance company can’t use medical underwriting. This means the insurance company can not refuse to sell you any Medicare Supplement plan it offers, charge you more for a Medigap policy than they charge someone with no health problems, or make you wait for coverage to start. While the insurance company can’t make you wait for your coverage to start, it may be able to make you wait for coverage related to a pre-existing condition.
It is important to buy a Medicare Supplement when you’re first eligible because you will generally get better prices and more choices among policies. Each insurance company decides how it’ll set the price, or premium, for its Medicare Supplements. It’s important to understand how the insurance company prices its policies. The way they set the price affects how much you pay now and in the future. Medicare supplements are priced or “rated” in three ways: community-rated, issue-age-rated, and attained-age-rated. Other facts can also affect your premium like where you live, medical underwriting, and household discounts.
What You Need to Know If You Want to Buy a Medicare Supplement
- You must have Original Medicare Part A (hospital insurance) and Part B (medical insurance) to buy a Medicare Supplement.
- If you have a Medicare Advantage Insurance Plan (like an HMO or PPO) but are planning to return to Original Medicare, you can apply for a Medicare Supplement before your coverage ends.
- You pay the private insurance company a premium for your Medicare Supplement in addition to the monthly Original Medicare Part B premium you pay to Medicare.
- A Medicare Supplement covers only one person. If you and your spouse both want Medigap coverage, you each will have to buy separate policies.
- Any standarized Medicare Supplement is guaranteed renewable even if you have health problems. This means an insurance company can’t cancel your Medigap policy as long as you pay the premium.
- Different insurance companies may change different premiums for the same exact policy. As you shop for a policy, be sure you’re comparing the same policy (for example, compare Plan A from one company with Plan A from another company).
What Medicare Supplement Plans Cover
The chart below shows basic information about different benefits that Medicare Supplement plans cover. If a percentage appears, the Medigap plan covers that percentage of the benefit, and you must pay the rest.
Guaranteed Issue Rights
Guaranteed issue rights are rights you have in certain situations. In these situations, insurance companies must sell you a Medigap policy, cover all your pre-existing health conditions, and can not charge you more for a Medigap policy regardless of past or present health problems. Do you have questions regarding your guaranteed issue rights? Give us a call to learn more.
Switching Medicare Supplements?
If you decide to switch, don’t cancel your first Medigap policy until you have decided to keep your new one. You have 30 days to decide if you want to keep the new Medigap policy. This is called your “free look period.” The 30-day free look period starts when you get your new Medigap policy. For more information contact a licensed insurance agent at Medicare Pathways.