Medicare supplement insurance can help cover some healthcare costs that Original Medicare doesn’t cover. This coverage is sold by private insurance companies and is commonly known as a Medigap policy, as it is designed to fill in the gaps left by Original Medicare Parts A and B, including co-payments, co-insurance, and deductibles.
If your visits to the doctor or hospital stays are fairly frequent and you have Original Medicare, a Medicare supplement plan may save you money. Medicare will pay the Medicare-approved amount of your covered healthcare costs, and then your Medigap policy will pay its share, which may include your deductible, co-payment, co-insurance, or expenses for medical care received outside the country.
Medicare supplement insurance does not cover prescription drugs, vision, dental, hearing aids, or long-term care. If you don’t have drug coverage, consider purchasing a separate Medicare Part D plan in addition to a Medigap plan.
How to Choose the Best Medicare Supplemental Insurance
Medigap policies come in 10 standardized packages labeled with the letters A through N (with the exception of 3 states that have different standardized Medigap plans). Of the A to N Medicare supplement plans, F is the most popular, followed by C, as those plans offer the most comprehensive coverage. The newest options are plans M and N. These are cost-sharing plans with lower premiums, popular with healthier seniors who don’t have ongoing healthcare expenses.
To choose the right policy, you should consider both your current state of health and your family medical history. The difference in plans may be minor, and the search can be confusing. You can use the Medigap online search tool on Medicare.gov to search for a policy that fits your needs and budget. The tool will break down what each plan covers, provide premium ranges, and list the insurance companies that offer the plan in your area. Even with this government online tool, the process can be difficult to understand, and you need guidance.
All Medigap policies labeled with the same letter must provide the same coverage. What you are looking for in comparing these policies typically the lowest premiums. If you sign up within six months after enrolling in Medicare Part B, you will get the best rate, as insurers cannot refuse you or charge you more as a result of your personal health issues during this open enrollment period.
Medigap Policy Pricing Methods
There are three different pricing methods for Medicare supplement insurance, which may affect your costs. These policies are sold as either:
- Attained age policies, with premiums that start low and increase as you get older
- Issue age policies, which increase in price with inflation, not the age of the insured
- Community-rate policies, for which every insured in the area pays the same premium, regardless of age
Attained age policies may initially save you money, but issue age and community-rate policies are usually less costly in the long run.
Medicare, Medigap, and Medicare Advantage Plans can be confusing subjects for most people. If you need friendly help and guidance in choosing the right Medicare supplement plan, contact our agent at Golden Financial Group in Fountainville, Pennsylvania for assistance.