Medicare Supplement Plans

What Are Medicare Supplement Plans?

Traditional Medicare (Part A and B) does not provide 100% coverage for medical expenses such as deductibles, co-payments, and co-insurance. Therefore Medicare Supplement Plans were designed to help pay the costs that Medicare does not cover. Medicare Supplement Plans are also referred to as Medigap.

Medicare Supplement Plans add additional health care insurance coverage provided by private insurance companies to cover the gaps in the traditional Medicare Plan. Medigap policies are regulated by Federal and State Laws in order to protect you as a consumer. Medigap policies have to be clearly labeled as Medicare Supplement Insurance, and the policies are standardized for each State.

Medicare pays the private insurance company a set amount of money for each person who enrolls in their plan. The insurance company then pays the medical bills for the enrollee. The enrollee is responsible for co-payments as described in each plan’s summary of benefits.

Am I Eligible For A Medicare Supplement Plan?

Medicare Supplement Plans only work in conjunction with Traditional Medicare.

Typically, you must have Medicare Part A and Part B in order to be eligible for a Supplement Plan.

Your application will be accepted if you are 65 or older and apply within six (6) months of your initial enrollment in Plan B of Medicare. Under certain circumstances pre-existing conditions might be waived.

As Medicare Supplement Plans only cover one person per policy you and your spouse must each buy separate policies.

Medicare Supplement Plans (Medigap) A through L And The New Plans M And N

Medicare Supplement Plans A through J

Plans A through J have more benefits, higher premiums, and lower out-of-pocket expenses. Basic benefits include Medicare Part A and B co-payment or co-insurance, and three pints of blood. Extra benefits may include Skilled Nursing Facility co-insurance, Medicare Part A and B deductibles, Medicare Part B excess charges, foreign travel emergency services, at-home recovery, preventive care, and some may still cover prescription drugs.

Attention: The benefits in any Medicare Supplement Plan A through L are the same for any insurance company, but the rate insurance companies charge for their plans may vary. When selecting a Medicare Supplement Plan, carefully compare each plan and compare different insurer quotes.

Medicare Supplement Plans K through L

Medicare Supplement Plans K through L have lower premiums and higher out-of-pocket expenses. Basic benefits include Medicare Part A hospital benefits, Medical Part A and B co-insurance or co-pay, blood, and hospice care. Extra benefits include Skilled Nursing Facility co-insurance and Medicare Part A deductibles.

Attention: When selecting a Medigap plan, carefully compare each plan and compare different insurer quotes. Make sure you have adequate coverage that meets your needs, but you don’t want to pay more as the benefits of each plan are the same for every insurance company.

What Is New In 2010 For Medicare Supplement Plans?

Starting June 1, 2010, the types of Medigap Plans that you can buy will change:

There will be two new Medicare Supplemental Plans offered: Plans M and N. The Plans E, H, I, and J will no longer be available to buy.

If you already have bought Plan E, H, I, or J before June 1, 2010, you can keep that plan.

Contact your plan provider for more information.

If you shop for a new plan, be aware that insurance companies may charge different premiums for exactly the same Medicare Supplement plan coverage. Before you enroll in a Medigap policy, be sure to compare policies from different providers, e.g. compare Plan A from one company with Plan A from another company.

Do I Have Medicare Part D Prescription Drug Coverage With A Medicare Supplement Plan?

If you have a Medicare Part D Prescription Drug Plan and a Medicare Supplement Plan that covers drugs, you need to tell your Medicare supplement insurance provider to remove the drug coverage from your policy.

You cannot have both Medicare Part D and Medicare Supplement plan drug coverage at the same time.

Attention: At times, Medicare Part D coverage is more beneficial than the Medicare Supplement plan drug coverage, so compare both carefully.

Can I switch to a different Medicare Supplement Plan (Medigap)?

In most cases, you won’t have a right under Federal law to switch Medicare Supplement plans, unless you are within your 6-month Medigap open enrollment period or are eligible under a specific circumstance for guaranteed issue rights.

But, if your state has more generous requirements, or the provider is willing to sell you a Medicare Supplement Plan, make sure you compare benefits and premiums before switching. If you bought your Medicare Supplement plan before 1992, it may offer coverage that isn’t available in a newer Medigap policy. On the other hand, older Medigap plans might not be guaranteed renewable and might have bigger premium increases than newer standardized Medicare Supplemental plans currently being sold.

If you decide to switch, don’t cancel your current plan until you have decided to keep the new one. On the application for the new plan, you will have to promise that you will cancel your first Medicare Supplement Plan. You have 30 days to decide if you want to keep the new plan. This is called your ‘free look’ period. The 30-day free look period starts when you get your new Medicare Supplement Plan. You will need to pay both premiums for a month.

Can I keep my current Medicare Supplemental Insurance or switch to a different Medigap policy if I move out-of-state?

You can keep your current Medicare Supplemental Insurance Plan (Medigap policy) regardless of where you live as long as you are still in Original Medicare.

How Do I Cancel My Medicare Supplement Plan (Medigap Policy)?

If you decide to drop your entire Medicare Supplement Plan policy, you need to be careful about the timing. For example, you may want a completely different Medigap policy (not just your old one without the prescription drug coverage), or you might decide to switch to a Medicare Advantage Plan (like an HMO or PPO) that offers prescription drugs.

You can join a Medicare Advantage Plan between November 15 through December 31 each year.

If you drop your entire Medicare Supplement Plan (Medigap policy) and the prescription drug coverage wasn’t creditable or you go more than 63 days before your new Medicare coverage begins, you will have to pay a late enrollment penalty.

Does Medicare Supplemental Work With A Medicare Advantage Plan?

No, you have to select one or the other. If you enroll in a Medicare Advantage Plan, your Medicare Supplement Plan coverage will not work.

You should (although legally you don’t have to) cancel your Supplemental policy if you choose to join a Medicare Advantage Plan.

What happens to my Medigap policy (Supplemental Insurance) if I join a Medicare Advantage Plan?

A Medicare Supplemental Insurance (Medigap policy) does not work with Medicare Advantage Plans. This means it won’t pay any deductibles, co-payments, or other cost-sharing under your Medicare Health Plan.

If you decide to keep your Medigap policy, you will have to pay your Medigap policy premium, but the Medigap policy won’t pay any deductibles, co-payments, or coinsurance under a Medicare Advantage Plan. So, if you want to join a Medicare Advantage Plan, you may want to drop your Medigap policy.

Attention: If you leave your Medicare Advantage Plan you might not be able to get the same Medicare Supplemental Insurance policy back you previously had, or in some cases, any Medicare Supplemental Insurance policy, should you later decide to switch back.

How Much Does Medicare Supplemental Insurance Cost?

Each plan’s basic and additional benefits are regulated by the State, so they are the same for every insurance company.

However, each provider can select which policies they want to sell and set their own prices, so Medicare supplemental insurance comparison is very important in order not to overpay!

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