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Posted 06/14/2021 in Category 1

Medicare Supplement Plans


Medicare Supplement Plans

What are Medicare Supplement Plans?

Medicare supplement Insurance Plans, also known as Medigap, help fill in the gaps of original Medicare.

You need to know that these plans don't replace original Medicare.  They simply add to Medicare Coverage.  When you buy a Medicare Supplement Insurance Plan, you are purchasing a plan that will help fill the gaps of original Medicare, such as copays, deductibles, and maximum hospital days.

There is another type of plan that can help limit your liability called Medicare Advantage (or MAPD with a drug plan).  We'll explain how Medicare Advantage works in a different article.  In general, Medicare Supplement Plans may cost more on a monthly basis but give more flexibility in providers and there is no pre-authorization.

But don't let the monthly premium fool you.  Depending on your circumstances, Medigap plans might even cost you less money than a zero premium Medicare Advantage plan.

Let's say you need chemotherapy.  A lot of MAPD plans have a chemotherapy copay of 20%. Let's say your Chemotherapy costs are $8000 per visit.  Then your copay would be $1600 until you hit the Maximum Out of Pocket for your MAPD.  In 2021 the highest MOOP a plan can have for an HMO is  $7,550.

But Medigap Plans work differently than Medicare Advantage Plans.

Let's look at an example in South Carolina.  You're 75 years old.  In 2021, you could be paying a premium of $173.23 with a major insurance company.  That's a total of $2,078.76, far less than the MOOP you might have had to pay on the MAPD plan.

Why is this?  Because a Medicare Supplement Plan F covers your Medicare copays and deductibles at 100%.

An MAPD plan includes medications, and Medigap plans do not, so you'd also have to factor that into your decision.  

Medigap policies don't cover everything

But keep in mind that Medicare Supplement Insurance Plans don't cover everything.  For example, because Original Medicare doesn't cover Long Term Care (LTC) costs, neither does your Medigap.  Original Medicare doesn't cover vision, dental, hearing aids, or eyeglasses.  Neither does your Medigap Plan.  

Medicare won't pay for skilled nursing care unless you've been admitted to the hospital as an inpatient for three days.  

Medicare generally doesn't cover you when you're outside the USA.

So if you want insurance to help cover those things, you'll need to get a separate plan.

Why do I need a Medicare Supplement Plan?

In the earlier example, your chemotherapy costs could have been sky-high, with either original Medicare (the copay is 20% and there is NO CAP) or an MAPD (the copay is many times 20%, but there is a Maximum Out of Pocket, as we discussed above).

If you don't have a large nest egg that will cover all of your non-Medicare covered costs, such as deductibles and copayments, then consider purchasing a Medigap plan.   

What does Medicare Supplement Insurance Cover?

With original Medicare, you must pay deductibles, co-payments, and excess charges when doctors do not accept assignment. Medicare Supplement Insurance policies help cover these copays, deductibles, and excess doctor fees.

These can be quite high.  For example, If your Medicare approved Chemotherapy costs are $8000, then your 20% would be $1,600.  And remember, there is NO MOOP on original Medicare.  You could have unlimited expenses.

Is Medicare Supplement Plan part of the Affordable Care Act?

Usually when someone asks me this, they are asking whether there is "guaranteed issue".  They want to know if the company has to sell a plan, regardless of health.

The answer is no, except in limited circumstances.

One of those limited circumstances is your Medigap Open Enrollment period. Open Enrollment begins when you are at least 65 or older and enroll in Medicare Part B.  It lasts for 6 months.

This is different from the Medicare Advantage and Prescription Drug Plan three month open enrollment period.  During this Medigap Open Enrollment period a company must sell you a Medicare supplement policy, regardless of your health. The insurance company cannot refuse to cover pre-existing conditions during this time period either.

Your six month Medigap open enrollment period is the best time to get a Medigap plan.

When do I need to sign up for Medicare

The best time to sign up for Medicare is six months before you turn age 65.  There are multiple deadlines to juggle, so it's important to know which enrollment deadlines apply to you.  This is important to avoid costly fines and gaps in coverage. 

Begin by checking on your eligibility . Most people should sign up for Medicare Part A (hospitals) and Part B (doctors) in the seven-month window that starts three months before the month you turn 65 to three months following your 65th birthday.

Once you get your Medicare ID card you can apply for a Florida Medicare Supplement Plan.

How much do Medicare Supplement Plans cost?

Although the benefits are standardized, the rates are not.  Rates are based on where you live, your sex, and the insurance company you select. Our Certified Medicare Agents can provide you with a quote. It takes less than five minutes.

What do I need to know when comparing plans?

This is where an insurance broker comes in.  You don't want to just use an online quoting tool to get rates and sign up direct.  It doesn't cost anything extra to use a broker.

Although the plans are standardized, there are differences.

That includes the company, the quality of service, and the price.   

In general, compare the benefits that are required by law, and disregard any ancillary benefits when choosing a plan.  After all, you are purchasing your plan to cover health costs, not a gym membership.

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