April 27

What Are Medicare Supplement Plans?


When it comes to Medicare and supplemental coverage, there are a lot of choices to consider. You’ll want to have a full understanding of Medicare Supplement plans and how they work before coming to a decision. Doing so will set you up for success. So, what are Medicare Supplement plans?

The Basics

Original Medicare, Part A and Part B, act as the foundation of your Medicare coverage. Part A helps to cover your inpatient hospital stay while Part B helps cover your outpatient services including anything from lab testing to doctor’s visits and surgeries.

However, you may be surprised to learn that Part B only pays for 80% of Medicare-approved services, meaning you are responsible for the remaining 20%. Your portion may not sound like a lot compared to 80%, but 20% can add up quickly depending on the medical services you receive and how often you visit the doctor.

This is where a Medicare Supplement plan comes into play. Supplement plans, also known as Medigap plans, help cover that leftover 20% including the Part A and Part B deductibles, copayments, and coinsurance.

With a Medigap plan, you can visit any provider in the U.S. that accepts Medicare insurance and there are more predictable out-of-pocket expenses. The same cannot be said for Advantage plans, so if you’re deciding between Medicare Advantage or Medicare Supplement, do your research carefully.

What are the different Medicare Supplement plans?

There are ten different Medigap plans to choose from: Plan A, B, C, D, F, G, K, L, M, and N. Each plan offers a different amount of coverage. Note that private insurance carriers are the ones that offer Medigap plans, not the federal government.

However, these plans are regulated and standardized, meaning their benefits stay the same no matter which carrier you choose. For example, a Plan B with the insurance carrier Cigna offers the same benefits as a Plan B with Blue Cross Blue Shield.

The most popular Medigap plans among Medicare beneficiaries are Plan F, G, and N. These three offer the most comprehensive coverage out of all the plans, with Plan F covering the most. However, Plan F is only available to you if you were eligible for Medicare before January 1st, 2020. If you were eligible for Medicare on or after January 1st, 2020, you cannot sign up for a Plan F.

How much does a Medigap plan cost?

You will pay a monthly premium for your Medigap plan. However, there is no set premium amount for each plan, meaning insurance carriers can choose how much to charge for a plan.

They base these premiums on a variety of factors, including your zip code, age, gender, tobacco use, and more. Because of this, you will want to shop around to see which insurance carriers offer the best rate in your area for the Medigap plan you want.

When can you sign up for a Medigap plan?

The most common time people sign up for a Medigap plan is during their Medigap Open Enrollment Period (MOEP). Your MOEP takes place 6 months from your Part B effective date. During this period, you can enroll in a Medigap plan without having to pass underwriting.

Underwriting is essentially a series of questions you answer regarding your health status. Insurance carriers ask these health questions to determine if they will accept you into their plan, meaning your application can be denied due to your health conditions.

However, if you apply for a Medigap plan during your MOEP, insurance carriers are required to accept you into their plan, no questions asked, so it’s essential you don’t miss this enrollment period. You can apply for a Medigap plan outside your MOEP, but you run the risk of being denied and finding yourself stuck in a plan you don’t like.

There are some states with exceptions to this underwriting rule, so it does depend on where you live.

Guaranteed Issue

There are also some scenarios that allow you to sign up for a Medigap plan without underwriting even if you are outside your MOEP. In these cases, you can qualify for a Guaranteed Issue (GI) window that allows you to sign up without health questions.

For example, if you have an employer plan that pays secondary to Medicare and that plan ends, you can sign up for a Medigap plan without underwriting. You would have 63 days to do so, starting the day you lose the employer coverage.

However, when it comes to GI, your Medigap plan options can be limited.

Final Thoughts

A lot of Medicare beneficiaries favor Medigap plans as these plans are more predictable and can give peace of mind. By choosing a Medigap plan, you can rest a bit easier knowing you have the freedom to choose your own providers and what your plan will cover.




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