| Planning for Medicare

senior insurance | supplemental health insurance | medicare | medigap | Medicare Supplement

UNDERSTANDING MEDICARE SUPPLEMENTAL INSURANCE

Medicare supplemental insurance sounds like a mouthful, but it’s really just a term used to describe extra coverage you can purchase in addition to your Original Medicare Parts A & B. The best Medicare Supplement plan for you will depend on your specific needs.


Like Original Medicare Parts A & B, Medicare supplemental insurance also comes in the forms of lettered plans. As long as you’re already enrolled in Medicare Parts A and B and you’re 65 years old, you can apply for a Medicare Supplement insurance plan.

HOW DOES MEDICARE SUPPLEMENTAL INSURANCE WORK?

Doctor’s stethoscope

Think of Medicare supplemental insurance as an extension of Original Medicare. It provides reduced copayments, deductibles, and other coverages for several categories of healthcare treatment.

For instance, several Medicare supplement plans provide 80 percent coverage for foreign travel emergency treatment. If you enjoy traveling abroad, you might want a Medigap plan that provides that kind of coverage.

There are just a few steps to enrolling in a supplemental plan:

  1. Enroll in Medicare Parts A and B, if you haven’t already.
  2. Research Medigap plans available through various insurers.
  3. Apply for a supplemental insurance policy that works for you.
  4. Pay the monthly premiums as agreed.

It’s pretty simple, as you can see.

When you go to the doctor or otherwise interact with a healthcare provider, you’ll use both your Medicare and supplemental insurance to cover the costs based on your copayments, deductibles, coinsurance, and other factors.

WHY IS MEDIGAP COVERAGE NECESSARY?

Financial insecurity can create stress in families. When you can’t adequately forecast healthcare costs, you might worry about potential bills.

However, Medigap coverage can ease some of the stress. Instead of paying out-of-pocket for huge medical bills, you can use gap coverage to shield you from those unexpected expenses.

Not only is this beneficial for the policy holder, but also for his or her family. Many consumers, especially when they get into their 60s, start worrying about providing for their dependents. Taking out extra insurance can ease the burden.

WHO SELLS MEDICARE SUPPLEMENTS?

Unlike Original Medicare, Medicare supplemental insurance is sold through private companies. You have the freedom to choose any company you want to hold the policy.

Preparing before open enrollment begins can help you fast-track the process. Research different options, compare plans, and decide which company appeals to you most.

Keep in mind that Medigap plans are standardized for all insurance companies. If you decide you want to purchase plan F, for instance, it doesn’t matter whether you buy it from Insurance Company A or Insurance Company B. It’s the same regardless.

Additionally, if you apply during the open enrollment term, a company can’t deny you a product it sells. Even if you have a pre-existing condition, you won’t pay more than other people for coverage.

HOW IS MEDIGAP PRICED?

Individual insurance companies set their own premiums. The companies take into consideration several things, including the plan’s included coverages, your age, your gender, and your lifestyle.

One great way to lower your Medigap premiums is to quit smoking. It can help you save between 10 and 20 percent on your monthly bill.

Additionally, you’ll want to purchase a plan that covers just what you need. It makes no sense to buy Plan F — the most comprehensive coverage — if you’ll never use things like skilled nursing or foreign travel emergency.

Just remember that premiums can vary widely. We recommend diligent comparison shopping to ensure you get the best price for whatever Medicare supplemental insurance you ultimately decide to buy.

You might also qualify for certain discounts. For instance, if you and your spouse decide to buy Medigap coverage together from the same company, you might get a few dollars knocked off your premium.

CAN I KEEP MEDIGAP FOREVER?

Once you’ve enrolled in a Medicare supplemental insurance plan, you get to keep it for the rest of your life. The insurance company can’t “drop” you as a customer because of a big medical bill, a developed condition, or any other reason.

There are only two ways to lose your coverage:

  1. Stop paying your monthly premium.
  2. Cancel your policy.

However, this doesn’t mean you can’t change plans. We recommend conducting regular comparison shopping to make sure you’re still getting the best deal. Just remember, that if you switch plans, you could be subject to medical underwriting. That means that, if your health has worsened, you could be denied or have to pay more for your premiums.

WHEN SHOULD I BUY MEDIGAP COVERAGE?

It’s best to buy your Medicare supplemental insurance when you become eligible for Original Medicare. Referred to as your Initial Enrollment Period (IEP), it begins on the first day of the month before your 65th birthday and ends six months later.

During this time, insurance companies cannot deny your coverage or charge you more due to your health. This means you can apply for Medigap insurance without completing medical underwriting, and you’ll usually receive lower rates.

Remember, you must be enrolled in Medicare Parts A and B to purchase Medicare Supplement insurance. So, if you’re still employed and covered by group health insurance, you can postpone your Medicare Part B enrollment. When you decide to enroll in Part B, you will receive guaranteed issue rights to apply for Medigap without medical underwriting.  

Get started early by familiarizing yourself with your options and deciding what types of coverage you might want. Consider conducting some comparison shopping  so you’re up to date on your options.

After you enroll in Medicare, you can buy a supplemental insurance policy. Make sure you do so before the six-month window closes.

Furthermore, evaluate your current budget to determine how much you can afford to devote to both fixed and changeable healthcare costs.

Some consumers would rather pay a larger lump sum every month than risk a big hospital bill, while others feel more comfortable taking on more risk. It’s entirely up to you.

HOW MANY MEDIGAP PLANS EXIST?

There are 10 Medigap plans available: A, B, C, D, F, G, K, L, M, and N. Each offers different levels of coverage.

For instance, Medigap plan C covers 100 percent of your skilled nursing facility coinsurance expenses, while plan K only covers 50 percent. You can weigh the different coverage levels to decide what fits with your budget and health status.

CONCLUSION

Buying a Medicare supplemental insurance policy can help you take better control over your finances, achieve financial security, and protect your dependents. It’s not as complicated as it may seem, so don’t let fancy terms intimidate you.

If you’re interested in signing up for Medigap, find products available in your area. You’ll thank yourself for taking the steps necessary to protect yourself and your family.