Medicare Supplement

Medicare Supplement Insurance (Medigap) is offered by private insurance companies to help supplement Original Part A and Part B Medicare. This allows you the peace of mind in knowing that whether it’s an emergency or just routine care, most or all of your medical bills will be paid. It’s estimated that nearly 70% of all bankruptcies in the United States result from medical bills. Therefore it is well worth the money to get a Medicare Supplement and not end up in that statistic.

What is Medicare?

Created in 1965, Medicare is a Federal program administered by the United States government to provide medical coverage to people aged 65 and over who have met specific criteria. It’s also available to those who are under 65 and have been receiving Social Security benefits for at least 24 months. Anyone on dialysis for end stage renal disease is also eligible.

Medicare consists of various “parts” which are designated in letters. This is not to be confused with Medicare Supplement Plans, which are also designated in letters.

Medicare Part A – Hospital Insurance

There is no premium if you have worked for 40 quarters (10 years) and paid into the system.

Medicare Part B – Doctor’s (Medical) Insurance

There is an annual premium which is typically deducted from one’s Social Security check each month. Those still on employer group insurance may opt-out of Part B until they retire and lose that coverage. Anyone not actively working over the age of 65 will receive a lifetime penalty of 10% per year on their premium while not enrolled in Part B Medicare.

Medicare Part D – Prescription Drug Plan

An important thing to remember is that Medicare Supplement plans do not include prescription drug coverage. You would need to enroll in a Part D drug plan if you wish to get coverage for your drugs. This coverage is not mandatory and there are only specific time periods during the year in which you may enroll or change plans. Some Medigap Policies used to cover prescriptions but no longer do.

There are several Part D drug plans under Medicare that are offered by private Medicare supplemental health insurance companies, each with a different formulary and premiums.

Why Get Medicare Supplement Insurance?

The reason why people choose a Medicare Supplement is to help pay for most or all of the additional expenses that Medicare does not cover.  There are certain items such as deductibles and co-pays in Part A & Part B Medicare, and without a Medicare Supplement these must be paid out-of-pocket. These are known as “gaps” in Original Medicare and can add up quickly in the event of an emergency and even routine medical care. Those with Medicare Supplemental Insurance, especially a Medigap Plan F do not have to worry about these extra costs.

The Medicare Gaps (Medigap)

Part A

• You must pay the Part A deductible if you are admitted to the hospital. This is $1132 in 2011. If you leave for 60 days or more you must pay this again, as it is not an annual deductible. There is also hospital coinsurance that you are required to pay after day 60. Most of the popular Medicare Supplemental Insurance Plans pay this deductible.

Part B

• You are responsible for 20% of all doctor’s bills, any blood deductibles, any Part B excess charges, and skilled nursing coinsurance. Medicare Part B also has an annual deductible which raises each year. This deductible is $140 in 2012.

It’s easy to see that these gaps can quickly accumulate even with just routine doctor’s visits.  Medicare Supplement Insurance is often a major reason people still have any savings after a major health condition. And while there are several plans available from many different companies, finding the right plan for you is easier than you think with the help of one of our Medicare Supplement Advisors.

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Which Medicare Supplement Plan is Best?

While there are several different Medicare Supplemental Insurance Plans available, insurance companies are not required to carry each plan. The plans are lettered A – N. Plans E, H, I and J were eliminated in June of 2010.

Deciding which Medicare Supplemental Insurance plan to choose is easier than you might think. A YourMedicareSupplement.com trusted advisor can easily determine which plan is best based on your current situation. 

The Most Popular Medicare Supplemental Insurance Plans

100 % Coverage

For those who prefer the best coverage with no out-of-pocket expenses other than their monthly premium, Medicare Supplement Plan F is the very best option. 

Medicare Supplement Plan F

• 100 % coverage of the gaps in Medicare
• No Network – Choose any doctor or specialist (no referral needed) that accepts Medicare
• No deductibles, Co-Pays or Coinsurance!

Medicare Supplement Plan F is the most comprehensive plan available and is also the most popular for this reason. Premiums vary by age, state, gender and tobacco use.

Medicare Supplement Plan G

• Medicare Supplement Plan G is also very popular – It covers 100% of the gaps in Medicare after you pay the annual Part B deductible
• Typically lower premiums than Plan F, especially for those over the age of 70
• No Network
• Beyond the monthly premium and Part B deductible there are no other out of pocket expenses
• 
  

This is an excellent choice for those looking to save money on their monthly premium and don’t mind paying a small deductible. Also one of the most popular Medicare Supplement plans available. 

Other Medicare Supplement plans

While there are several other plan letters available, as mentioned Medicare Supplement insurance companies are not required to offer all of them. Therefore some of the more unpopular plans typically offer less benefits for a higher premium than a Medicare Supplement Plan G for example. Be sure to have someone thoroughly explain each plan you are interested in and check the rates for each from the top Medicare Supplement insurance companies.

Medicare Supplement Eligibility

If you are turning 65 and taking Part B Medicare, there is a 6 month open enrollment period from the effective date of Part B. You may enroll in any Medicare Supplement plan during this time and all pre-existing conditions will be waived. Most people apply 3-6 months early to make sure their Medicare Supplement coverage begins on the 1st day of their Medicare. Medicare Supplement insurance is also guaranteed renewable. As long as you continue paying your monthly premiums your coverage can never be canceled.

Medicare Supplemental Insurance and Pricing

Medicare Supplemental Insurance rates are determined in three different ways.

Attained Age – In this case Medigap Premiums are based on the age you apply for the plan and go up as you get older. Rates also typically increase based on inflation factors each year as well. Attained age Medigap Policies are very popular due to the premiums starting out much lower. Medicare Supplemental Insurance premiums still vary by each company with attained age rates.

Issue Age – These premiums tend to start out much higher than other types. And although your rate will not increase because of your age each year, it will increase due to medical inflation and increases can be quite high. These Medigap Plans are not very common, and most people who have Medicare Supplemental Insurance do not have this type of plan.

Community Rated – This type of Medigap Insurance has everyone entering at the same rate regardless of age or gender. Depending on the situation this might be a good option for some people. Again Medicare Supplement rates vary widely depending on company, pre-existing conditions, and location.

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Retiring and needing a Medicare Supplement?

For those who elected to opt out of Part B Medicare when turning 65 due to having employer health benefits, you are still entitled to the open enrollment period. During this period you will be guaranteed Medicare Supplement insurance coverage with no medical underwriting. This period begins from the 1st day that Part B coverage begins and lasts for 6 months.

If you are leaving your employers benefits and are over the age of 65, a guaranteed-issue period for Medicare Supplement insurance may apply. Those who have already have Part B Medicare over the age of 65 and are losing their employer benefits may also enroll in a Medicare Supplement and be guaranteed-issue. Some Medicare Supplement insurance companies also offer guaranteed policies during the 63 days if you voluntarily leave your employer benefits due to retiring. Check with one of our advisors to see if you qualify based on your own circumstances.

Medicare Supplemental Insurance Rates

There can be a large difference in premiums for Medigap Insurance from each company, for the same coverage. Medicare Supplemental Insurance is standardized, meaning all Medigap Plans are the same. Also each year most companies have a rate increase. This means your premium will raise each year for your Medigap Insurance. For instance, your Medicare Supplement Plan F coverage with one company may have an 18% rate increase in it’s second year.

Many people fail to shop the rates for Medigap Plans each year, and end up paying far more than they should. Medicare Supplemental insurance is great coverage, but that doesn’t mean you should pay more than you have to for it. Our agents shop the market each year to ensure you pay the least amount possible for your Medicare Supplemental Insurance coverage!

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Choosing a Medicare Supplement plan is easier than you might think. Our goal is to help educate individuals who qualify for Medicare, and make sure they get the very best coverage to meet their needs.

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YourMedicareSupplement.com is provided solely for informational purposes and estimations of policy rates regarding Medicare Supplement Insurance, and is not connected or affiliated in any way with any government organization, the Federal Medicare Program, the Centers for Medicare and Medicaid Services, or The Social Security Administration.