A Medigap policy (also known as Medicare Supplement Insurance or MedSup) is health insurance sold by private insurance companies to fill the “gaps” between what the original Medicare plan covers and what the beneficiary will eventually have to pay. Medigap policies help pay some of the medical bills that the original Medicare plan does not cover.
Medicare Advantage (MA or Medicare Part C) is a private insurance plan that provides your Original Medicare, Part A and Part B, coverage. Medicare Advantage plans may also offer additional benefits not included in Original Medicare. Medicare Advantage beneficiaries receive all of their Medicare benefits through this private plan, as opposed to the federally administered government program (although you must continue paying your Part B premium even if you enroll in a Medicare Advantage plan).Medicare Supplement Plans, also known as Medigap or MedSup, are also sold through private insurance companies, but it is not stand-alone medical coverage. Instead, Medigap functions as supplemental coverage to Original Medicare, covering gaps left behind by Part A and Part B insurance. Medicare supplemental insurance may cover costs like Medicare coinsurance and copayments, deductibles, and medical care while traveling outside of the United States. There are 10 standardized plan types available, each given a lettered designation (Plan F, for example). Plans of the same letter offer the same benefits regardless of location and carrier, with the exception of Massachusetts, Minnesota, and Wisconsin. While benefits are standardized, the costs are not, meaning they could fluctuate depending on the plan provider.
Having Original Medicare, Part A (inpatient hospital care) and Part B (doctor’s services), does not constitute comprehensive coverage. For example, Original Medicare does not offer prescription drug coverage. To receive this benefit, you would have to join a stand-alone Medicare Prescription Drug Plan which would function alongside Original Medicare. That still leaves certain coverage gaps, such as copayment and coinsurance costs, as well as coverage while traveling abroad. A Medicare Supplement Plan (also known as Medigap) may cover some of the costs Original Medicare doesn’t, such as copayments, coinsurance, and deductibles. You would continue paying your Part B premium if you chose a Medigap plan. Some Medigap plans offer additional services like coverage when you travel outside the U.S. However, while some of these plans in the past included prescription drug coverage, Medigap policies sold after January 1, 2006, are not allowed to cover prescription drugs.
Medicare Supplement Plans (or Medigap) are standardized across the nation, except in Massachusetts, Minnesota, and Wisconsin. Each of the 10 plans is denoted by a letter, and the currently available plans are A, B, C, D, F, G, K, L, M, and N. These plans are provided through private insurance companies, but plan type with the same letter must offer the same set of basic benefits regardless of location. Medigap Plan F is considered one of the most popular plans because it offers the most comprehensive coverage of certain health care costs, including: Medicare Part A coinsurance and hospice care coinsurance Medicare Part A deductible Medicare Part B coinsurance or copayment Medicare Part B deductible Part B excess charges First three pints of blood used in a procedure Skilled Nursing Facility (SNF) care coinsurance Coverage outside of the United States (up to plan limits) Medigap Plan G offers all of the same benefits as Plan F except for the Part B deductible. Medigap Plan N covers all the same benefits as Plan F with the exception of the Part B deductible and Part B excess charges. Additionally, Plan N pays for 100% of the Part B coinsurance, except for copayments of up to $20 for certain office visits and up to a $50 for emergency room visits that do not result in an inpatient admission.
Medical underwriting involves a review of one’s medical history. It is a practice employed by private health insurers when determining if they will provide coverage to a prospective beneficiary, what premium to charge, and whether to impose a waiting period before coverage starts. If you enroll in Medicare Supplement Plan (also known as Medigap or MedSup) during your six-month open enrollment period, you don’t have to submit to medical underwriting. Your Medigap open enrollment period begins on the first day of the month you turn 65 and are enrolled in Medicare Part B. For example, if you turn 65 on July 14, and are enrolled in Medicare Part B, you have until December 31 to enroll in a Medigap plan. If you apply for Medigap coverage after your open enrollment period has passed, you may have to go through medical underwriting. The insurer may review your medical history and refuse to sell you a policy, or sell you one at a higher cost, if you do not meet its underwriting requirements. Some insurers practice underwriting to prevent swells of people from only joining a plan only when they are sick and in urgent need of medical care. Sometimes you can join a Medigap plan after the open enrollment period without undergoing a medical underwriting review. Some examples include, but are not limited to: You are under 65 and eligible for Medicare because of a disability or end-stage renal disease (ESRD). You have a guaranteed issue right, such as losing employer health coverage.
There can be good reasons to consider changing Medicare Supplement (Medigap) plans if you can find another insurer that’s willing to sell you a policy. Unlike other types of Medicare coverage, you can join or switch Medigap plans any time the plan is taking new members and will accept your enrollment. However, you’ll usually have fewer options available if you switch plans after your Medigap Open Enrollment Period, the six-month period when you’re first eligible for Medicare Supplement insurance. During your Open Enrollment Period, you can join any plan with guaranteed issue, meaning Medigap insurers must sell you a policy and can’t charge you a higher premium for health reasons. After this period, you may have trouble finding an insurer that will sell you a plan, especially if you have pre-existing conditions. If you do decide to switch plans, know that your Medigap coverage may cost more, and the plan may require medical underwriting. Also, keep in mind that if you switch Medigap plans and change your mind, you may not be able to get your old plan back.
That being said, there are certain situations where you might consider changing plans; you could even have guaranteed-issue rights in some circumstances. Some reasons include:
You’re unhappy with your Medigap insurance company. There are 10 Medigap plans available in most states, and coverage is standardized, meaning that plans of the same letter provide the same benefits, regardless of insurer. If you’re dissatisfied with your Medigap insurer and can find another insurance company that sells your current plan, you can switch plans and get the same benefits you currently have.
Your health needs have changed. If you’re in good health, you may want to switch to a Medicare Supplement plan with more basic coverage, so that you’re not paying for benefits you’re not using. Or, conversely, your health may have declined recently, and you may want to switch to a Medigap plan with more comprehensive coverage.
Your financial situation has changed. If your finances have changed, you may want to switch to a plan with a less expensive premium, especially since benefits are standardized for the same plans. Keep in mind that Medigap plans use different methods for pricing plan premiums. Some base premiums on your current age, meaning the premium cost increases with your age. Other insurers base the premium on your age when you enroll, while others charge all plan members the same premium, no matter how old they are. Always ask the Medicare Supplement insurer which pricing method it uses so you know how much you’ll pay both now and in the future.
You have a Medicare SELECT plan and moved out of the plan’s service area. Medicare SELECT plans are a type of Medigap plan that may require you to use provider networks to be covered. If you move out of your Medicare SELECT plan’s coverage area, you can switch to a Medigap Plan A, B, C, F, K, or L sold by any company in your new location that is licensed to sell the Medigap policy.
Your Medigap insurance company goes out of business. If you lose your Medigap plan because the insurer goes bankrupt, you have a guaranteed-issue right to join another Medicare Supplement plan. You can join a Medigap Plan A, B, C, F, K, or L sold by any company in your state that is licensed to sell the Medigap policy.
The Centers for Medicaid and Medicare Services Star Rating system helps beneficiaries and their families compare plan performance and quality for Medicare Advantage, Medicare Prescription Drug Plans, and Medicare Cost plans. Medicare star ratings are based on data collected from customer satisfaction surveys. Medicare plans are rated on a scale of 1 to 5, with a 5-star rating being the highest score a plan can receive. More stars indicate better performance and quality:
What if I change my Mind? With insurance you have a 30 day “free look”. If you decide to drop, you may get a refund of your first month’s premium (if deducted electronically). You will also still be responsible for any premiums for your original plan until you actually cancel it.
How can you get me the same plan that I already have for a lower price? All of the Supplement plans are regulated by the Federal Government (they all have to offer the exact same thing, and same packages). However, the fees that the different carriers charge are not regulated, therefore each carrier can charge whatever amount they want to. Also, your existing carrier will not lower your price. If you want to change which plan you are on, or want to see if you can get a lower price you MUST CHANGE CARRIERS.
On Plan F & G – What are “excess charges”? If a client goes to a Dr. that accepts Medicare, but has not agreed to accept the amount that Medicare pays as “payment in full”, the Dr. can then turn around and bill the patient for up to 20% of the difference. This is considered an excess charge. Very rarely does this actually happen.
Guaranteed Issue vs Guaranteed Acceptance. Acceptance: within 6 months of joining/adding Part B. This generally applies to people that worked past age 65. No health questions are involved.
Issue: When someone has an involuntary loss of health coverage. This is when they retire and are no longer covered by a group health plan, or if they have received a letter from the carrier that is managing their Medicare Advantage plan stating that they will no longer be covered. If submitting as a GUARANTEED ISSUE, can ONLY apply for Supplement Plan A or F. Generally, an agent will attempt to submit an application for the plan that the client actually wants. If declined, they can resubmit as a Guaranteed Issue.