Medicare Supplement

What Is Medicare Supplemental Insurance

Medicare supplement insurance (Medigap), is sold by private insurance carriers. It is used to help defray the costs that Original Medicare (Parts A & B) do not cover. These costs may include:

  • co-payments
  • co-insurance
  • deductibles
  • international travel

Medigap plans generally don’t cover long-term care, vision, dental, hearing aids or private duty nursing.

You can purchase a Medigap policy from any insurance that is licensed in your state. Any standard Medigap policy is guaranteed renewable, regardless of any health issues that may arise. This means that insurance companies can not cancel your Medigap policy, as long as you continue to pay your premiums, regardless of health issues.

Medigap Benefits

Every Medigap policy must adhere to federal and state laws designed to protect the insured. All Medigap products must also be clearly identify as “Medical Supplement Insurance”. Insurance companies can only sell you a standardized policy, which is identified in most states by letters (see chart below). In Massachusetts, Minnesota and Wisconsin policies are standardized using a different system.

The chart below shows basic information about the different benefits Medigap policies cover. Yes = the plan covers 100% of this benefit No = the policy doesn’t cover that benefit % = the plan covers that percentage of this benefit N/A = not applicable

* Plan F also offers a high-deductible plan. If you choose this option, this means you must pay for Medicare-covered costs up to the deductible amount of $2,200 in 2017 before your Medigap plan pays anything.

** After you meet your out-of-pocket yearly limit and your yearly Part B deductible, the Medigap plan pays 100% of covered services for the rest of the calendar year.

*** Plan N pays 100% of the Part B coinsurance, except for a copayment of up to $20 for some office visits and up to a $50 copayment for emergency room visits that don’t result in inpatient admission.

If you live in one of these 3 states, Medigap policies are standardized in a different way.

How to Switch Medigap Policies

If you decide to change insurance companies, call the new insurance company and arrange to apply for your new Medigap policy. If your application is accepted, call your current insurance company, and ask for the coverage to end. The insurance company will provide you with details on how to submit a request to end your coverage.

Once your new Medigap policy has begun, you have a 30 day “free look period”. In order to take advantage of this free look period, it is necessary to overlap a month of each policy, which requires the insured to pay premiums for both polices for one month. Do not cancel you first Medigap policy until you have decided to keep the second Medigap policy.

Medigap vs. Medicare Advantage

A Medigap policy is different that a Medicare Advantage Plan (Part C), which offers Medicare benefits. A Medigap policy only supplements benefits from Original Medicare.

In order to quality for a Medigap policy, you must have Medicare Part A and Part B. However, if you have a Medicare Advantage Plan (Part C), you can apply for a Medigap policy, but you must leave the Medicare Advantage Plan before your Medigap policy begins. You cannot be enrolled in a Medigap Policy and Medicare Advantage Plan simultaneously. If you have a Medicare Advantage Plan, it is illegal for any providers to sell you a Medigap policy unless you switch back to Original Medicare.

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Medicare Supplement

Medicare Supplement plans (Medigap) cover “gaps” in Original Medicare (Parts A & B). Each state approves a set of coverage options.

Medicare Advantage (Part C)

Medicare Advantage Plan work like an HMO or PPO health plans and help to limit out of pocket expenses. Plans may also include prescription drug coverage.

Medicare Part D Plans

Medicare Part D Plans have a list of covered medications called a Formulary. Medications on the Formulary will be covered as part of Part D.