Medicare Supplement (Medigap) Insurance

Medicare Supplement plans are generally thought of as the most comprehensive and flexible plans. However, the premiums for Medicare Supplements are higher than premiums for Medicare Advantage plans.

One of the key benefits of a Medicare Supplement Plan is that there is no “provider network.” You can use any doctor or hospital that accepts Medicare, anywhere in the U.S. And, in most cases, you don’t need a referral to see a specialist.

So, if you have preferred doctors and hospitals or if you want coverage outside your local area, a Medicare Supplement Insurance plan may be right for you.

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A Medicare Supplement Insurance (Medigap) plan pays some of the health care costs that Medicare Part A & Medicare Part B don’t cover, like coinsurance, copayments, and deductibles. Private insurance companies sell Medicare Supplement (Medigap) Plans. Some Medicare Supplement Plans also cover certain benefits that Medicare Parts A & B don’t cover.

Medicare Supplement Plans do not provide prescription drug coverage. Prescription drug coverage is provided by Medicare Part D plans.

Guaranteed Issue Coverage: One of the most important things to know about Medicare Supplements is that you must apply for your Medicare Supplement within six-months of your Medicare Part B effective date in order to be guaranteed issue for coverage. This six-month window is called your Medigap Open Enrollment Period. During this period, you can sign up for any Medicare Supplement Plan. You do not have to go through underwriting or answer health questions to get the coverage. You are guaranteed the coverage.

If you miss your Medigap Open Enrollment Period, you will have to be underwritten for a Medicare Supplement plan in most cases. This means the insurance company can deny you coverage. For example, they may deny you if you had certain previous or ongoing health conditions, like joint replacement, surgery for cancer, congestive heart failure, coronary artery disease, diabetes with circulation problems, TIA, stroke, heart attack, and heart disease.

In contrast, if you choose a Medicare Advantage plan, you are always guaranteed issue during a valid enrollment period. However, if you are in a Medicare Advantage plan, you may not be able to switch to a Medicare Supplement plan. If you decide you want the fuller, more flexible coverage provided by a Medicare Supplement plan, you will have to be medically underwritten and you may not be approved for coverage, depending on your health conditions.

Medicare Supplement Plans

There are ten different Medicare Supplement Plans: A, B, C, D, F, G, K, L, M, N.

This chart shows basic information about the different benefits that Medigap policies cover. If a percentage appears, the Medigap plan covers that percentage of the benefit, and you must pay the rest.

Medicare Supplement Insurance (Medigap) Plans
Benefits A B C D F* G K L M N
Medicare Part A
coninsurance and
hospital costs
(up to an additional
365 days after
Medicare benefits
are used)
100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
Medicare Part B
coninsurance or
copayment
100% 100% 100% 100% 100% 100% 50% 75% 100% 100%
***
Blood
(first 3 pints)
100% 100% 100% 100% 100% 100% 50% 75% 100% 100%
Part A hospice care
coinsurance or
copayment
100% 100% 100% 100% 100% 100% 50% 75% 100% 100%
Skilled nursing
facility care
coinsurance
100% 100% 100% 100% 50% 75% 100% 100%
Part A deductible 100% 100% 100% 100% 100% 50% 75% 50% 100%
Part B deductible 100% 100%
Part B excess
charges
100% 100%
Foreign travel
emergency
(up to plan limits)
80% 80% 80% 80% 80% 80%
Out-of-
pocket limit
in 2019**
$5,460 $2,780

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Medicare Supplement Plan G now provides the best value for full, flexible coverage. In the past, Medicare Supplement Plan F was the plan of choice for those seeking the fullest, most flexible coverage. In 2015, Congress passed the Medicare Access and CHIP Reauthorization Act (MACRA). This Act limits the ability of new Medicare beneficiaries to purchase plan F after January 1st, 2020. Medicare beneficiaries already with Plan F can keep that plan.

Medicare Supplement Plan F provides first dollar coverage. More specifically, Medicare Supplement Plan F pays the Medicare Part B annual deductible ($185 in 2019). This meant that when you went to the doctor, in most cases, you did not pay anything out-of-pocket. Congress wants Medicare beneficiaries to have skin in the game. Thus, they have decided to phase out Plan F for new Medicare beneficiaries.

Existing Plan F Medicare Supplements are grandfathered; you may keep your Plan F Medicare Supplement if your Medicare Entitlement date is prior to January 1st, 2020. Plan F is still a good plan, but in some areas Plan G can provide comparable coverage at a lower overall cost. The only difference between the plans is that Plan F covers the Medicare Part B deductible and Plan G does not. In 2019, the Medicare Plan B annual deductible was $185. The premium savings for Plan G generally was greater than the additional $185 benefit that Plan F provides.

Medicare Supplement Premiums

Medicare Supplement premiums are generally based on your age, zip code, and gender. Insurance companies have three methods for determining premiums:

Issue Age polices base your premium on your age when you signed up for the Medicare Supplement. Future premium increases are based on the claims experience within the entire pool of insured that you are grouped with. Your premiums do not increase because you are older or because of your personal claims experience.

Attained Aged policies base your premium each year on your current age. Attained Age policies generally start off with lower premiums than Issue Age policies, but eventually the Attained Age premiums catch up with and then surpass Issue Age premiums. Attained Age premiums are based on your current age, and therefore increase every year because you are older.

Community Rated policies charge the same premiums to everyone in a geographical area without regard to age.

Medicare Part D

When you buy a Medicare Supplement, you need to select a Medicare Part D Prescription Drug plan. None of the Medicare Supplements provide prescription drug coverage. In the past, some Medicare Supplement Plans did cover medications, but not anymore.

If you are over 65 and still have your health insurance through your or your spouse’s employer, you need to make sure that the employer’s prescription drug coverage is credible in the eyes of Medicare. If it isn’t, you will need to get a Medicare Part D plan. If you don’t sign up for a Medicare Part D plan when you are supposed to, you will pay late enrollment penalties when you do sign up. These penalties do not go away and remain with you for as long as you are on Medicare.

Medicare Enrollment Periods

There are three different Medicare enrollment periods: Initial Enrollment Period, Special Enrollment Period, and the General Enrollment Period.


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