Choosing Supplemental insurance for Medicare
Medicare and Medigap plans work collaboratively, and you essentially opt for the latter as a way of supplementing what Original Medicare doesn’t cover. The federal government has changed the choice of Medigap plans in 2020 for seniors who will be eligible to purchase them at the start of the year.
Private insurers offer Medicare Supplement plans for sell but they are strictly regulated by the federal government. They are available for purchase by people who have already enrolled in Original Medicare (Plan A and B), but not for those who have Medicare Advantage plans. The reason is because the Advantage plans are purchased from private insurers and work as substitutes for Original Medicare. Medigap plans cover payments on deductibles and copays as well as a list of other health care costs that Medicare doesn’t handle.
Here is a rundown on the process of choosing supplemental insurance for Medicare.
Understanding More About Medicare Supplement Plans
Back in 2010, the standardized list of Medicare Supplement plans was introduced by the federal government. They are represented by different letters including A, B, M, and N which are the most common out of the 10 Medigap plans. However, some of the Medicare Supplements that were popular in the past are no longer available to newly eligible seniors. They include Plan C and F, and it’s because of the 2015 Congress decision to prohibit these plans from covering Part B annual deductibles. These deductibles pay for outpatient services including doctor’s visits.
Seniors who had already purchased C and F plans will continue to receive coverage for the $198 deductible on Part B in 2020. Worth noting is that the Centers for Medicare and Medicaid Services, the regulatory body, have not set the deductible amount on this specific Medicare plan for 2021. Plan C differs from Plan F in terms of what is not covered, and C does not cover 15% of the excess charges related to visits to doctors who don’t prescribe to Medicare. However, Plan F takes care of these costs.
Plan G comes closest to Plan F in terms of the level of coverage provided. F matches up to what G covers except for Part B deductibles as well as the excess charges racked up from visiting nonparticipating doctors.
Reports have it that the federal government could be gearing up to do away with Plan F, according to Casey Schwartz who serves as the Medicare Rights Center senior counsel for federal policy and education. Schwartz explained that the claims have caused widespread panic and it’s important to reassure seniors already enrolled in Plans C and F that nothing is changing.
By the start of the year (2021), seniors who have not already turned 65 or met the special eligibility requirements to sign up for Medicare, and buy Medigap plans, won’t be able to purchase the F or C plans. However, for the 2020 enrollment period, seniors buying Medigap plans can still purchase these supplemental covers.
The Best Time To Purchase Medigap Plans
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To reiterate, as long as you have a Medicare cover you can purchase a Medigap plan to supplement the gaps. Insurers generally will not deny you coverage in the seven-month window during the Initial Enrollment Period (IEP). The private insurers who sell these plans also cannot charge you higher premiums if you have preexisting conditions if you purchase a Medigap cover at this time.
Seniors can still get a Medigap plan after the IEP lapses but it’s each insurance provider’s discretion whether or not to sell you the policy. They may enroll you into the Medigap plans at higher rates in this case if you have preexisting medical conditions. It also depends on the set guidelines according to your state and it is important to consult the Department of State so that you are up to speed with your specific rights.
The bottom line is that you should buy a Medigap plan immediately you are eligible to enroll in Medicare for the guarantee of ongoing and stable coverage in the future.
Medigap Plan Options
Visit medicare.gov to compare Medigap plans with a detailed breakdown of how they are similar and differ from each other. Medigap covers are assigned letter names, for instance, Plan A, Plan B, Plan C, etc. There are currently ten Medigap plans in existence but only eight are available for purchase after two were phased out.
The federal government has standardized Medicare Supplement plans which means that the same cover provides the same level of coverage regardless of where you purchase the policy. These plans also provide the same level of coverage in all states except for Minnesota, Wisconsin, and Massachusetts who have standardized plans for their respective states.
Important Aspects When Choosing Supplemental Insurance For Medicare
There are certain aspects that all Medigap plans cover across the board while certain costs are only handled by specific supplemental covers. You generally want to end up with a Medicare Supplement that takes care of the big-ticket items including:
- 20% share of doctor’s visits costs.
- 20% of outpatient service charges including lab tests.
- Hospital admission deductibles.
- Coinsurance charges related to nursing care and hospital stays.
Look out for plans that cover 100% of Part B coinsurance and note that Plans K and L require you to cost-share these charges. Another consideration is the out-of-pocket limit which refers to how much of these costs you have to take care of on your own before the Medigap plan kicks in.
The biggest factor worth noting is that Medigap plans do not cover vision, dental, or prescription drugs. However, some insurers might offer these covers as added benefits or perks bundled up with the standardized Medicare Supplement plans.
How Much Will You Pay For A Medicare Supplement?
Nationwide, the average cost of Plan F is an estimated $326 monthly. Plan F has a higher deductible option which costs an estimated $2,300 and it comes with lower monthly premiums averaging $68. Premiums are generally based on a three-pricing system and pricing is also dependent on your specific state:
- Community rated premiums are imposed on everyone with a Medigap policy regardless of their age.
- Issue-age related premiums take into account your age when you are initially purchasing a Medicare Supplement. Typically, you will pay lower rates if you are younger, but within the required age-limit to take up these covers. Your age does not come into play when calculating future premium increments in this case.
- Attained-age rated premiums are priced according to your current age and future increments also take into account your age.
When choosing supplemental insurance for Medicare it is important to ask insurers about what pricing system they use.