KNOWING WHEN TO BUY MEDIGAP INSURANCE
Medicare Supplement or Medigap insurance is a type of healthcare coverage the fills in the gaps between what Original Medicare covers and what it doesn’t. You can choose from 10 available Medigap plans: A, B, C, D, F, G, K, M, N, and O. That is, unless you live in Massachusetts, Minnesota or Wisconsin, which offer different plan types.
However, you don’t just want to pick a letter. Instead, it’s important to evaluate each available plan based on Medigap plan cost, coverage levels, and other factors. If you know when you can buy Medigap insurance, you’ll be able to plan ahead so the decision doesn’t feel rushed.
WHEN DO YOU BECOME ELIGIBLE FOR MEDIGAP INSURANCE?
You become eligible for Medigap insurance when you turn age 65 and enroll in Medicare Part B. You have a six-month Initial Enrollment Period (IEP) to apply for the plan you want. During the IEP, you aren’t subject to underwriting, which means that pre-existing conditions and other issues can’t influence your premium.
The clock for the IEP starts on the first day of the month preceding your birthday. For instance, if you turn 65 on April 10, you can apply for Medigap plans as early as March 1.
To qualify for Medigap, you must first have Original Medicare Parts A and B. There’s no requirement to sign up for Part D, but you can if you wish.
If you decide you don’t like your Medigap plan, you might be able to change it later during a Medicare Open Enrollment Period. However, if you take that route, you become subject to underwriting and even denial. The insurance companies can alter your premium based on pre-existing or chronic conditions, lifestyle habits, and more.
In other words, if you wait to apply for Medigap or change your mind later, you risk paying a much higher premium or having your application denied.
That’s why it’s important to do your research first and choose a Medigap insurance plan you’ll find acceptable well into the future.
There are certain cases when you can apply for a new Medigap plan without any consequences. For instance, if your insurance company goes out of business, you have guaranteed issue rights. This means that you can find another insurance company without penalty.
The same is true if you have a Medicare Advantage (MA) plan, but you want to switch to Medigap insurance within the first 12 months. You have the option, then, to apply for Medigap without being subject to underwriting.
MA, also called Medicare Part C, works like an HMO or PPO. If you decide you don’t like your plan, you can switch back to Original Medicare anytime within that first year and gain access to Medigap. You can also drop your MA coverage for Medigap during the Annual Election Period every year from October 15 to December 7.
HOW DO YOU APPLY FOR MEDIGAP PLANS?
Unlike Original Medicare, Medigap plans are available through private insurance companies. All of the plans remain standardized across the board. For instance, if both Insurance Company ABC and Insurance Company XYZ offer Medigap Plan A, you’ll get the same coverage no matter which you choose.
The difference is in the price, which is why it’s essential to conduct some comparison shopping prior to deciding on a plan. Insurance companies determine Medigap plan cost, so your quotes will vary.
Use Ensurem’s Medigap Quoter to get customer quotes on Medigap insurance. Provide your name, birthdate, and zip code, then check the plans in which you’re interested. The Quoter will provide you with quotes from the insurance companies in your area that offer those plans.
Keep in mind that insurance companies aren’t required to offer any or all Medigap insurance plans. For instance, Insurance Company ABC might offer Plans F, G, and N, while Insurance Company XYZ might offer Plans A, B, and M. When you’re comparing quotes, make sure the plan letters match.
Using the Quoter allows you to instantly compare lots of different quotes. Some insurance companies offer household discounts, so you might want to take that into consideration, too. A household discount can apply when both you and your spouse obtain Medigap coverage through the same provider. Discounts can take up to 12 percent off your premium.
WHAT DOES A MEDIGAP PLAN COST?
Medigap insurance plan costs vary depending on several factors, including the individual insurer and where you live. That’s why you can’t get an accurate quote without providing your zip code.
Keep in mind, though, that premium cost shouldn’t be your only consideration. Some plans, such as Medigap Plan F, cover the Original Medicare Part B deductible. As of 2018, the deductible is $183, so you wouldn’t have to pay that out-of-pocket.
However, buying a plan that doesn’t cover the Part B deductible might be significantly less expensive. If you’ll save more by paying the deductible in premium costs, you might want to go with the less-comprehensive plan.
Other costs include copayments and coinsurance. Consider your monthly budget as well as your average healthcare costs to determine which Medigap insurance plan will work best for you.
DO PRE-EXISTING CONDITIONS MAKE A DIFFERENCE?
As mentioned above, Medigap insurance companies can’t factor pre-existing conditions into a plan’s premium if you enroll during your IEP. However, in some cases, the plan won’t cover treatment for a pre-existing condition for six months after you buy it.
In this case, you might still be able to use secondary insurance to cover the costs of treating your pre-existing condition, especially if you’re still working and have access to employer-provided insurance when you turn 65.
Your plan premium won’t change, though. After the six-month waiting period, you can use your Medigap insurance to cover any treatment you might need as long as the plan itself covers it.
Knowing when and how to buy Medigap insurance will make retirement less stressful. It’s one less thing to worry about as you wrap up your career and look forward to the adventures ahead.
Additionally, you can better budget your income when you know what your premiums will cost and how much you’ll need to pay out-of-pocket. Since healthcare costs can be unpredictable, it helps to simplify as many of the financial aspects of the process as possible.
If you’re nearing age 65, use the Ensurem Medigap Quoter to get quotes for plans in which you’re interested. Shopping now will eliminate the need to rush later.