According to the National Council on Aging, about 10,000 people enroll in Medicare daily. One of the most important decisions each one of these individuals must make is choosing a Medigap policy and the amount of coverage they will have in addition to their Original Medicare.
Medigap, also called Medicare Supplements, is a health insurance policy that provides coverage for the out of pocket expenses that Original Medicare leaves up to the beneficiary to pay. Out of pocket expenses such as coinsurance, deductibles, and co-payments.
There are many options when it comes to Medigap insurance. The process can be confusing and overwhelming. Below are the important factors to consider when choosing a Medigap policy.
Choosing a Medigap Policy
The federal and state laws governing these policies are the same in all states except in Minnesota, Massachusetts, and Wisconsin. The standardization of the plans ensures that the different private insurance companies offer the same benefits.
There are ten different types of Medicare Supplements depicted by letters A to N. In most states, policies must include the primary benefits, although others opt to provide additional benefits. The other three states have a different way of standardizing their plans.
There’s a lot of plans out there that may seem similar but are not. Some of these plans include Medicare Advantage, Medicare Supplement, and Medicaid.
Medicare Advantage plans usually have a provider network, co-payments and typically require a referral. Medigap policies allow you to see any provider that accepts Medicare Assignment, they don’t usually have copayments and they don’t require referrals.
Medicare and Medicaid are two separate things; if you have both, you may be eligible for additional coverage.
What is Covered by Medigap Policies
Medigap Plans are designed to fill the gaps left by Original Medicare. For instance, if Medicare pays for a medical procedure, but there’s still money owed, your Medigap policy will settle the balance.
Unlike other Medicare plans such as Medicare Advantage, Medigap supplement policies don’t have a network of hospitals or physicians.
Types of Medigap Policies
There are 10 different types of Medigap policies, lettered A-N. The benefits vary from one letter plan to the next. However, they all have one thing in common each Medicare Supplement is standardized by the government.
This is great news for beneficiaries; it’s much easier to compare plans when they are the same type of coverage with only a difference in Medigap costs.
For example, a Plan F with one company is the same Plan F with another company. The only difference is the price and the company rating. While you may be able to find cheap coverage through Joe Shmo Medicare Supplements, you are better off choosing a quality company at an affordable price.
All of this may seem like a lot of information or be confusing to you, that is why it is beneficial to speak with an insurance agent licensed in your state. Since each plan has a different amount of coverage and a different premium; what is beneficial for your neighbor may not be what is best for you.
Insurance agents are experts, they simplify Medicare plans for you and help you choose the plan that will fit your lifestyle. Speaking with an agent will give you confidence in your supplemental Medicare Insurance coverage.
Most Important Things to Consider When Choosing Medigap Policies
The state lays out the rules and regulation governing the plans. Therefore, the laws are similar for all insurance providers.
Some of the facts that you should have in mind include:
- You should have Medicare Part A and Part B.
- Be a resident of the state offering the plan.
- You should be ready to leave a Medicare Advantage Plan if you want a Medigap policy- it’s against laws for an insurer to provide Medigap plan to anyone that already has a Medicare Advantage Plan.
- The plan doesn’t cover spouses or two people, each recipient must get their own separate policy.
- Medigap plans don’t include prescription drug coverage. You will need to enroll in a separate Part D Prescription Drug Plan.
- You must pay your monthly rates to the private insurer in addition to the Part B payments to Medicare.
- All policies are subject to renewal regardless of the health status of the insured, meaning that the insurance company has no right to cancel your insurance coverage if you maintain regular premium payments.
These are the biggest aspects of Medigap policies you should look at before enrolling into a Medigap policy.
Medigap Pricing Mechanism
These premium determination methods are different and will affect how much you pay now and in the future. A plan that seems inexpensive during your enrollment may end up being the most exorbitant as years go by.
As we pointed out earlier, Medigap plans are standardized by the federal government. Therefore, whichever premium determination method a company uses, it’s the most important thing to consider.
Provider Reputation or Rating
Though, not as important as the pricing mechanism, company reputation is imperative to securing a good Medigap supplemental policy.
In a situation where two insurance providers use the same premium determination method and prices are equal, choosing a company with the highest rating would perhaps be the best move.
Your Personal Preference When Choosing a Medigap Policy
There are ten different federally standardized Medigap supplement policies. The term ‘standardized’ implies that the benefits from each plan are the same regardless of the insurance provider.
Your choice of whether to go with Plan F, G or N should be driven by your personal preference.
Would you be okay with having to pay out of pocket costs for coinsurance or co-pays every time you pay a visit to your physician? If no, then you should probably go with Medicare Plan F.
If having to pay a few dollars every time you see your doctor doesn’t hurt your pocket, then Medicare Supplement Plan N may be a good fit for you.
Your Medical History
Consider your personal and perhaps family health history when choosing a Medigap policy. This factor plays a major role in the determination of what plans fit an individual best.
You might want to select a plan like Medicare Plan G or N if you are a particularly healthy person with no prior health complications. Plan G can also make the most sense at times when the Plan F premium difference is higher than the Part B deductible.
For example, if Plan F is $200 more a year than Plan G and the only coverage difference is the Part B deductible ($185 per year in 2019) then you would save $17 a year by paying your own deductible. This amount could become a higher saving as years go on and rates increase.
How Do I Purchase Medigap Supplemental Policies
There are a few options you must purchase Medigap Supplemental policies:
- Call the number provided above to speak with an agent licensed in your state
- Fill out the contact form to have an agent reach out to you
- Complete the online rate form to have an agent compare rates with the top carriers in your area