What Is Medicare Supplement Insurance
Original Medicare does not cover all costs. Medicare Supplement insurance, or Medigap, can cover what Medicare does not. Private insurance companies vetted by the federal government offer it to help manage out-of-pocket expenses. These policies do not add coverage. Instead, they help pay for what Medicare Part A and B does not, including copays, coinsurance, and deductibles.2 It does not affect which doctors you can see.
To understand the value of a Medicare supplemental plan, you need to understand what Original Medicare does and doesnt cover.
Original Medicare is made up of Part A and Part B .
Part A has a deductible you must pay before any benefits kick in for hospitalization. It covers the first 60 days of Medicare-eligible inpatient hospital care in a benefit period. After that, you pay daily coinsurance amounts, depending on the length of your stay.
Part B also has an annual deductible. Once you reach it, Part B covers 80% of eligible doctor-related, testing and medical-equipment expenses. You are responsible for the balance .
In 2021, the Part A deductible for hospitalization is $1,484 per benefit period and the Part B annual deductible is $233.3
Medicare Supplement insurance is designed to help cover these out-of-pocket deductibles and coinsurance.
Best Medicare Supplement Companies
Unlike with traditional health insurance, where policies differ among providers, Medicare Supplement plans are standardized so that the benefits for each plan letter are the same for each company. This means that Medicare Supplement Plan G from UnitedHealthcare will be identical in coverage to the Plan G offered through Aetna.
However, rates will change from company to company since each provider will choose a different pricing structure for its Medicare Supplement plans. It’s important that you take this into account along with each providerâs financial strength and history of rate increases. Some companies may offer cheap rates but will increase your rates more quickly as you age.
- Medigap plans offered: A, F, G, N and high-deductible F
- Average cost of Plan G: $179
Cigna, like UHC and Aetna, currently has an AM Best rating of A, meaning that it has the financial strength to continue to pay health insurance claims in the future. Cigna plans are widely available, and Cigna stands out for its high-deductible Plan F, which is an affordable way to protect yourself if you need expensive medical care. Cigna’s Medicare Supplement plans are generally priced higher than plans from some other companies, but using the company’s household premium discount can help you to get a better deal. The discount is available in most states when multiple family members in the same household enroll in the same Cigna Medigap plan.
What Do Medicare Supplement Plans Not Cover
Medigap policies do not extend coverage beyond Original Medicare.
For instance, they do not cover dental and vision care, hearing aids and non-skilled home care.
Except for plans written before 2006, Medigap also does not cover prescription drugs. Separate plans, called Medicare Part D, are available through private insurers approved by the federal government.
Lastly, Medigap does not cover private-duty nursing or long-term care. Such coverage would have to come from a standalone long-term care insurance policy.
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How Do I Get Prescription Drug Coverage With Medigap
Some old Medigap plans include prescription drug coverage, but those are no longer for sale. If you need prescription coverage, you will need to purchase a Medicare prescription drug plan. Specifically, Medicare Part D. Part D helps pay for prescription drugs.
Be aware that Medicare Advantage plans include prescription drug coverage.
Read our guide to Medicare Part D for more information.
How Does An Agent Or Broker Help You With Medicare Choices
A Medicare agent or broker can help you narrow down your options and pick the best one. To do this, theyll learn about your health goals and budget. Theyll present you with options to meet your goals within your budget. They can help you enroll in the plan you choose.
You can also contact an agent or broker to help you change plans if the one youre enrolled in changes coverage or doesnt meet your needs.
Using a Medicare broker or agent is free you dont pay for their service directly.
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How Much Does Medigap Cost
According to MedicareRights.org, the national average for a Medigap plan is $183 per month. Coverage levels vary, so your preferred plan may have a different price.
Prices vary between insurance providers. According to Medicare.gov, there are three common pricing structures for Medigap:
- Community pricing: Everyone pays the same price, regardless of age or other factors.
- Issue age: Your premium depends on your age when you first buy a Medigap policy.
- Attained age: Your premium is based on your current age, so your rate raises as you age.
Ask your preferred insurance company about their pricing model. Depending on your situation, one structure may fit your needs better than others.
The costs of a Medigap policy can and will vary. Medigap plans are standardized from state to state. However, each insurance company can charge different prices for the same plans.
That’s why you need to shop around and compare insurance companies. QuoteWizard can help you easily compare quotes from top insurance companies and find the best Medigap plans.
Q: When Can I Get Medigap
A: The Medigap open enrollment period begins the first day of the month in which you are 65 and enrolled in Medicare Part B. It last six months. During this time, insurance companies cannot refuse to sell you a policy, delay your coverage, or charge you more than others.
If you wait until after the open enrollment period, insurers can reject your application. This can happen to people with preexisting conditions and illnesses.
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What Are My Choices Of Medigap Policies
The federal government has standardized Medicare Supplement plans. You receive the same coverage no matter which insurance company sells you the Medigap plan. Premiums for the same policy can vary between insurance companies. But, only the quoted price and the reputation of the insurer will vary.
There are ten separate plans, labeled A through N. Two plans, C and F, are no longer offered to newly eligible beneficiaries. You can find the specific benefits that each plan covers in this comparative chart.
Once you decide how much coverage you want, you can check online or contact an insurance agent or broker for quotes.
Medicare Supplement Plan G What You Need To Know
June 13, 2017 By Garrett Ball
If youre turning 65, youve probably heard of Medicare Supplement Plan G. But, if youre looking for a good Medicare supplement, you might feel like youre drowning in a bowl of alphabet soup.
There are a lot of different Medigap plans Medigap is another term for Medicare supplement and it can be hard to determine which plan suits your needs and your budget.
Weve found that the Plan G is generally the best coverage at the best price, which explains why its the 2nd most popular supplement in the nation.
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Why You Need A Supplement Plan
As you probably already know, Medicare doesnt cover everything. Even if youre signed up for Medicare Part A, B, and D, youre still on the hook for a variety of additional expenses.
That includes costs like deductibles, coinsurance, and copayments. Original Medicare also wont cover foreign travel emergency costs.
It might not sound like a big deal, but all of this can add up pretty quickly. The Medicare Part A hospital inpatient deductible and coinsurance will set you back $1,316. And that doesnt include all of the other potential costs that could come your way.
The chart in the next section will show you all of the bills that a Part G plan can pick up for you.
If You Take This Statement At Face Value It Would Imply That Virtually All Insurance Is Worthless
Heres why: in the vast majority of cases, people pay into insurance and then rarely use it. This is what keeps insurance companies in the black.
How many people spend thousands over years on homeowners insurance and never have their house burn down? How many people purchase car insurance and only experience a couple of fender benders over their lifetime? Are they essentially giving their money away to an insurance company? Yes, you could say that, and it wouldnt be inaccurate, just a bit misleading.
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Coverage Gaps In Original Medicare
People can receive Medicare benefits in one of two ways: Original Medicare or Medicare Advantage.
Original Medicare, also known as traditional Medicare, consists of Part A and Part B. At age 65, you can automatically be enrolled or manually enroll in Original Medicare.
Original Medicare has several out-of-pocket costs, including monthly premiums, annual deductibles and copayments for doctor services.
Unlike Medicare Advantage, there is no yearly out-of-pocket maximum in Original Medicare.
These gaps in Original Medicare insurance can quickly add up, especially if youre in poor health or on a fixed budget.
2022 Original Medicare Out-of-Pocket Costs at a Glance
- 20 percent of all Part B services, including doctor visits, durable medical equipment and outpatient therapy
- $1,556 Part A hospital deductible for each benefit period
- $233 Part B deductible
- $170.10 monthly Part B premium
Most people dont pay a monthly premium for Medicare Part A. But if you didnt work enough before turning 65, you may face this extra fee, which can cost up to an additional $499 a month.
There are also several coverage gaps in Original Medicare. For example, vision, dental and hearing are not covered unless deemed medically necessary.
Medigap, also known as Medicare supplement insurance, can help pay some of the remaining health care costs Original Medicare doesnt cover.
Don’t Leave Your Health to Chance
Medigap policies are sold by private insurance companies.
Medigap Plan Coverage Highlights
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Is Medicare Part D Worth It
If youre going with a Medigap plan rather than Advantage, prescription drugs wont be covered. Therefore, its advised that you enroll in a Part D plan. If you delay enrollment, you could face a penalty for the life of your policy.
If you dont take any medications, you might wonder why you would enroll in such a plan today. In reality, it can easily be worth it, considering the money you could save on future penalties.
When Original Medicare Might Be Sufficient
For many low-income Medicare beneficiaries, theres no need for private supplemental coverage. Almost one in five Medicare beneficiaries are dual eligible for both Medicare and Medicaid.
This includes Medicare enrollees who are eligible for full Medicaid as well as those who qualify for Medicare Savings Programs that help low-income seniors pay premiums and cost-sharing under Original Medicare.
For dual-eligible enrollees who qualify for full Medicaid, that coverage picks up where Medicare leaves off, covering coinsurance and deductibles, as well as services not covered at all by Medicare . For Medicare beneficiaries who qualify for Medicare Savings Programs but not full Medicaid, there are varying levels of assistance available depending on the enrollees income.
Those who receive the least assistance might find a Medigap plan to be beneficial, but most Medicare Savings Program enrollees do not have additional coverage under a Medigap plan.
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What You Need To Know About Medicare Advantage Plans
The Medicare Advantage program is an alternative way to receive your Medicare Part A and Part B benefits. Instead of getting your Medicare benefits directly from the federal government, theyre administered by a private, Medicare-approved insurance company. Except for hospice care, which remains covered under Medicare Part A, a Medicare Advantage plan provides at least the same level of coverage as Medicare Part A and Medicare Part B .
Many Medicare Advantage plans contract with health-care facilities, doctors, and other medical professionals and suppliers to deliver care and services to members of their Medicare Advantage plans. This arrangement is referred to as a Medicare Advantage plans provider network. Health-care providers who participate in a Medicare Advantage plans network agree to help coordinate care and provide services at a cost that may be lower than their normal fees. This might mean lower out-of-pocket costs to you if you choose to enroll in a Medicare Advantage plan. However, costs vary among plans.
To enroll in a Medicare Advantage plan, you must have Medicare Part A and Part B and live in the Medicare Advantage plans service area.
Other Ways To Supplement Medicare
If Medigap and Medicare Advantage dont meet your needs, there are other ways to supplement your Medicare coverage, including:
- Group health coverage from your employer, former employer, spouses employer, or spouses former employer: Depending on the size of the employer sponsoring the health plan, Medicare may be your primary or secondary health coverage, also known as primary or secondary payer. The primary payer receives claims first and pays the healthcare provider according to the plan limits. If there are leftover costs, the secondary payer reviews the claim and pays according to its plan limits. Even with two payers, you may still have additional, out-of-pocket costs.
- Private dental and vision coverage: Original Medicare insurance does not cover these services at all, so this coverage would operate independently of your Medicare.
- Medicaid: If you qualify for Medicaid, it would be your secondary insurance and Medicare would be your primary.
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What Medigap Covers
All Medigap policies address 50% to 100% of your Medicare Part B coinsurance or copayment and your Part A hospice care coinsurance or copayment. Most Medigap plans cover 50% or more of your Part A deductible, and some will cover your Part B deductible as well. Two Medigap options, Plans K and L, even place a cap on your annual out-of-pocket expenses.
While a Medigap policy reduces your out-of-pocket costs for healthcare, it does not expand the services Medicare covers. Original Medicare, for example, does not cover prescription drugs, vision, dental, and ear care. And Medigap offers no benefits in these areas either. The only exception is that some Medigap plans do provide international health coverage while you are travelling, which you dont get from Original Medicare alone.
For more information about Medigap, please reference the 2020 Medigap policy guide, developed by the Department of Health and Human Services.
Is Part B Worth It
Another mistake we see is people who thought they didnt need Part B because they are healthy. Ive seen a number of individuals who said they didnt get sick often so they opted to only enroll in Part A. Every one of these people assumed that Part A Hospital benefits cover everything in the hospital. So they decided to skip Part B thinking that they didnt mind paying out of pocket for an occasional doctor visit. They didnt realize Part B covers many things that occur in a hospital.
Usually they discover their error when they are sent for an MRI or a surgery and find out they now owe thousands or tens of thousands of dollars. Be sure you dont make the same mistake. If you are unsure, ask your insurance agent: Do I Need Medicare Part B?
If he or she tells you no, be sure you get a full explanation on why you are able to delay your. Get a second opinion if you are unsure, and never rely on Social Security to give you the right answer. Weve seen too many people get wrong answers from inexperience government employees.
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Medicare Supplement Insurance Plan Premiums
If you purchase a Medicare Supplement insurance plan, remember you might end up paying several different monthly premiums:
- The Medicare Supplement insurance plan premium
- Your Medicare Part B premium
- Your stand-alone Medicare Part D Prescription Drug Plan premium, if applicable Premiums for Medicare Supplement insurance plans can vary widely. As with any purchase or proposed purchase, it is wise to shop for the best price for the coverage you think you will need.
How Much Does Medicare Advantage Cost
Many Medicare Advantage plans have a $0 premium, so be sure to explore your options. Baethke explains it like this: If you enroll in a plan that does charge a premium, you must pay this fee every month in addition to your Medicare Part B premium, which is around $149 .
Medicare Part Bs coinsurance and the deductible is $203, according to Medicare.gov, and once they are met, your copay under Medicare Advantage is typically 20% of the Medicare-approved amount for most services and products, such as durable medical equipment like glucometers, walkers, hospital beds and more.
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If Youre 65 Or Older:
If you apply for Medigap coverage after your open enrollment period, theres no guarantee an insurance company will sell you a policy. Insurers can:
- Request your medical history as part of the conditions of issuing you a plan
- Refuse to sell you a policy
- Make you wait for coverage to start
- Charge you more
