17 Keys to Understanding Medicare Supplemental Insurance

Medicare is the first step for securing insurance after age 65, but it only covers a portion of your healthcare costs. Medicare helps you pay for many services and supplies, but you still face out-of-pocket payments. If you want to save more money on doctor’s visits, you can buy a Medicare Supplemental Insurance policy.

What Is Medicare Supplemental Insurance (Medigap)?

Medicare Supplemental Insurance, or “Medigap,” is a separate insurance policy that fills in the financial gaps of your Medicare policy. Private companies sell Medigap policies. Your supplemental Medigap plan can help cover costs for:

  • Coinsurance
  • Copayments
  • Deductibles

You can only purchase a Medigap policy if you are over 65. If you are on Medicare because of a disability, you typically must wait to enroll in a Medigap policy until a few months before your 65th birthday. However, some people with disabilities may still qualify for Medigap. Contact a Medigap insurance company in your state to learn if you are eligible.

This supplemental health care coverage works through reimbursement. You pay your coinsurance, copays, and deductible upfront, and your Medigap insurance pays you back.

Medigap Plans

Most states sell standardized Medigap plans. Each plan offers different benefits. All plans of the same letter must offer the same benefits no matter which private insurance company you choose.

If you live in Massachusetts, Minnesota, or Wisconsin, your Medigap insurance plans are categorized differently. Please contact us for more information about the plans in one of these states.

Deciding which Medigap plan to add to your Medicare coverage depends on your circumstances. Deciding which plan to choose can be overwhelming. If you want help, we can help you find the right Medicare Supplemental Insurance plan. Contact us today for more information.

Do I Need Medigap Medicare Supplemental Insurance?

If you are like many Americans, it may come as a surprise to you that Medicare isn’t free, and it doesn’t cover every aspect of your healthcare. Some people wonder if buying a supplemental policy on top of Medicare is the most economical choice.

For most people, supplemental insurance is a wise investment because you can’t anticipate how frequently you may need to visit the doctor or stay in a hospital. Medigap is a smart idea for anyone who:

  • Has extended or multiple hospital stays each year
  • Has frequent visits to a doctor or specialist
  • Requires ongoing medical services
  • Travels abroad

Some retirement or pension benefits might cover costs that Medicare will not. If your retirement or pension plan provides broad medical coverage, you may not need to buy a Medigap policy. It’s best to contact an expert if you are unsure if Medigap is right for you.

What Has Changed in 2020?

In 2020, new Medigap policies do not cover deductibles for Part B Medicare, which makes Plans C and F unavailable to new people. If you enrolled in your plan before January 1, 2020, this rule would not apply to your policy.

17 Things to Know About Your Supplemental Insurance Policy (Medigap)

Medigap coverage is the smart choice for most Americans, but understanding how it works is often challenging. Below we provide the most important information you must know about Medigap supplemental insurance.

1. Medigap Picks Up Where Medicare Leaves Off

Medicare pays for many healthcare expenses, such as visits to your doctor, supplies, and hospital stays. However, it won’t ease the out-of-pocket financial burden of copays, deductibles, and coinsurance fees. Medigap plans can reimburse you for these costs. Your Medigap plan specifies which out-of-pocket expenses and the dollar amounts for compensation.

2. Medigap Won’t Cover Everything

Each Medigap plan has different benefits, but most won’t cover a few expenses. Usually, Medigap plans will not cover vision, eyeglasses, dental care, hearing aids, private-duty nursing, or long-term care. No new Medigap plans cover any prescription drug costs, including out-of-pocket expenses for Part D plans.

3. You Need Medicare Part A and Part B to Get Medigap

To qualify for a Medigap plan, you must already have Medicare Part A and Part B. If you haven’t enrolled in Medicare Part A and Part B, do this before investigating your Medigap plan.

4. Medigap Is Not a Medicare Advantage Plan

Medicare Advantage Plans are not the same as Medigap supplemental insurance. Medigap helps pay costs that Original Medicare does not pay. Medicare Advantage Plans provide the same coverage as Original Medicare.

5. Medigap Only Covers One Person

If you and your spouse want supplemental insurance for your Medicare policy, you cannot share a policy. Each person must enroll in and pay for their own, individual Medigap policy.

6. Your Medigap Buying Options Are Open

Every state has several licensed insurance companies that sell Medigap. You have the freedom to choose which insurance company you want.

7. You Pay Medigap Premiums Separately

You must pay for your Medigap premium separately from your Medicare premium costs. Your Medigap insurance company will send you a bill that you pay directly to them.

8. It’s Against the Law to Have Medigap and a Medicare Advantage Plan

If you have a Medicare Advantage Plan, by law, no agent can sell you a Medigap policy. If you switch to an Original Medicare plan from your Medicare Advantage Plan, your agent can legally sell you a Medigap policy.

9. Your New Medigap Policy Won’t Cover Prescription Drugs

Any Medigap policy sold after January 1, 2006, does not cover prescription drugs. If you have a Medigap plan secured before this date, your plan may cover prescriptions. For everyone else, prescription drug coverage comes from Part D Medicare or through a private Medicare Advantage Plan.

10. Insurance Companies Cannot Deny Your Medigap Policy Renewal

Your insurance provider cannot deny your Medigap policy renewal even if you develop health problems. As long as you keep your policy and pay the premiums, you are guaranteed coverage with your original standardized policy.

11. Some Insurance Plans Are Not Medigap

There’s a lot of information to sort out with your Medicare insurance. Many people confuse other types of insurance with Medigap. Any PPO, HMO, or fee-for-service plans are not Medigap. Medicaid, TRICARE, Veteran’s benefits, long-term care insurance, and Indian Health Service plans are not Medigap.

12. Switching Medigap Policies Could Cost You Money

If you change Medigap policies, be mindful of when you do this. You could be subjected to a late enrollment penalty if you cancel your policy. The drug coverage isn’t creditable or if you go 63 days or more without prescription drug coverage. If you are switching from an employer-sponsored drug coverage, the insurance company may waive the late enrollment penalty.

13. You Can Shop Around for the Best Premiums

All Medigap plans of the same letter must offer the same benefits. However, different insurance companies may charge different premiums. You can investigate the prices of different insurance companies in your state and find different prices for the same coverage.

14. There Is a Set Enrollment Period for Medigap Coverage

You can enroll in Medigap for six months after your 65th birthday without getting turned down based on a pre-existing condition. Once this period expires, private supplemental insurance providers can refuse you coverage.

15. If You Cancel Your Medigap Policy, You May Not Get It Back

Please understand that if you cancel your Medigap policy, you may not be able to re-enroll in the same policy again.

16. Some Medigap Policies Cover Foreign Travel Emergency Care

If you are using retirement to see the world, you can receive some medical coverage from specific Medigap policies. Medicare usually won’t pay for health care or supplies when you travel outside of the U.S. If you choose a plan with coverage, it often comes with a $250 deductible. It covers emergency care outside of the country if your condition begins within the first 60 days of your trip. Your foreign travel coverage has a lifetime limit of $50,000.

17. Pricing Can Be Confusing

Going for the bargain price for your Medigap policy could cost you in the long run. Some inexpensive policies end up costing much more in the long run. Some insurance companies factor your age into the pricing, which means it can increase with each birthday. To avoid this, look out for “attained-age rated” policies. Community-rated or no-age rated policies are statistically the least expensive policies over time.

When to Ask An Expert

With fees for late enrollment and the potential to save (or spend) a lot of money, you must understand your Medigap policy before enrolling. Studying the 17 key points above is the first step to choosing the right plan for you.

Before jumping into any policy, many people consult a professional Medicare advisor to assist with their Medigap decision. If you have any questions about Medigap plans or rules, our experts are on your side.

We Can Help You

Medicare Supplemental Insurance is a sound investment for most people on Medicare. It can help cover many of the out-of-pocket costs you can expect from a visit to your doctor or the hospital. Understanding all the rules can be a challenge.

Contact Seniors Solutions Group If you want help with understanding your Medigap options. We can help you find the right Medigap plan and make sure you enroll within your enrollment period. 

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