Medicare Supplement plans, also referred to as supplemental insurance or a Medigap policy, were designed to help pay the costs that original Medicare does not cover. It is widely known that Medicare insurance was established to cover basic health care needs. When you only have Part A and B, you are not covered for all your medical expenses and will have to pay deductibles and co-payments out of your own pocket. Being hit with an unforeseen illness or a chronic condition, the out of pocket expenses are devastating for most individuals on Medicare.
A Medigap policy supplements your Medicare benefits, which means that Medicare will first pay its share of the approved amounts for your covered health care costs, before your supplemental insurance will pay its share. In 47 states (except MA, MN, and WI), there are ten different Medigap policies available for 2017 which include the plans A, B, C, D, F, G, K, L, M and N. Depending on the policy you choose, you can rest assured that most if not all of your medical expenses will be paid by your insurer. However, there are also policies where you as the enrollee may still be responsible for any deductibles or co-payments as described in the plan’s summary of benefits.
Medigap policies are regulated by Federal and State Laws in order to protect you as the consumer. You may purchase one at any insurance company that is licensed to sell them in your state. A policy only covers one beneficiary, so you and your spouse will both need to buy your own policy. Supplemental plans do not include prescription drug coverage, so you need to enroll in a separate PDP (Prescription Drug Plan, also called Medicare Part D) if you want to be covered for medication. Supplemental plans also typically don’t include vision or dental care, hearing aids or eyeglasses. Medicare Supplement plans have been standardized since 1992 and have seen few changes over the years. The last significant update of Medigap Plans was in June 2010. In some states, you may be able to buy a type of Medigap policy that is called Medicare SELECT. It is a supplement plan that require the beneficiary to use specific hospitals and, in some cases, specific health care providers to be fully covered.
Each Medigap plan offers a specific set of benefits to fill gaps in your original Medicare coverage in 2017. Government regulations specify that all must adhere to set standards. You can rest assured that each supplemental policy, no matter which provider offers it in your state, has the exact same benefits, so you can shop around to see which insurance provider in your state may offer it for the lowest monthly premium. Premiums for 2017 may vary between companies, so you should always compare quotes for supplement plans.
Although the standardization of the 10 Medigap plans makes it easy to compare ‘apples to apples’, when choosing a Medigap policy, the variety of options, each with a different set of benefits and deductibles, seems overwhelming at first. Which one is best for you depends on your individual medical needs. A plan that may be perfect for your spouse may not be best for you.
To find the right plan, start making a ‘must-have’ list with benefits you really need. Ask yourself questions such as: Are you blessed with good health and mainly visit your doctor for preventive care? Or do you frequently see different health care providers? Which prescription drugs do you take? Do you use medical equipment? Do you wear hearing aids or glasses? What about dental?
Next, find out which plans are available in your State. Unless you are living in Massachusetts, Minnesota, and Wisconsin, you will have all 10 Medigap plans available. Compare each plan with your list. Which one of the benefits, premiums and deductibles (if any) suits you best? Keep in mind that your health conditions, drug needs or your financial means may change in the upcoming months. The policy you choose must still be affordable in case a serious health issue arises.
When you compare costs between plans, not only look at the premium, but at the total amount of payments, including any deductibles and co-payments you may be responsible for.
Once you have decided on the plan, you can start researching which insurance companies in your state are offering it. You can do so using the official Medicare Plan Finder. Next step is to get quotes for the supplement plan you selected. As the benefits are standardized, you may consider selecting a local ‘underdog’ insurance company that may offer it for a lower premium than ‘big brand insurers’ (provided that they offer good customer service).
PS: Don’t forget that no Medigap plan will cover you for prescription drugs, so also consider joining a Part D prescription drug plan for 2017!By: Joseph Rosario