When it comes to choosing a Medicare plan, you have several choices. This is a good thing
Medicare supplements are a category of health insurance that private companies sell to cover the gaps in Medicare. We refer to Medicare supplement insurance plans as Medigap Plans.
Think of a Medicare supplement as a card that straps onto the back of your Original Medicare. This card helps pay for the expenses that Medicare would normally pass on to you. Medicare has gaps, such as copayments, coinsurance, and deductibles. You must bear the cost of these when you access medically-approved services.
Having a supplement policy means that Medicare will first pay its portion of your medical costs. Then, your policy will chip in and pay its share. This is typically the remainder of your bill, although it depends on which policy you select.
The 10 Standard Medicare Supplements
Each Medicare supplement is required to follow the guidelines created by Medicare itself. Every standardized plan is named by a letter. There’s Medigap Plan A, B, C, D, F, G, K, L, M and N.
Each one of these policies offers the same amount of benefits from company to company.
The monthly premium is the key difference between supplements with the same letter. You can shop multiple supplement insurance carriers for the best rate. The most popular Medigap plans are Plans F, G, and N.
There’s also a high deductible version of Medigap Plans F and G.
Benefits of Medicare Supplements
- Choose your doctors – There are no networks. You have the freedom to choose doctors, as well as hospitals.
- No referrals – You can visit specialists without getting a required referral.
- Guaranteed renewal – You can never be discharged due to a health condition.
- Know Your Costs – You avoid unplanned out-of-pocket medical costs throughout the year.
What Is Not Covered By Medicare Supplement Plans
Some things aren’t covered by your Medicare Supplements, like:
- Hearing aids
- Contacts or eyeglasses
- Retail prescription drugs
- Long-term care or custodial care
- Routine dental, vision, and hearing exams
Medicare Supplement Terminology
It can be difficult to understand the terminology, so we’ve explained the benefits as described by Medicare.
Medicare Part A coinsurance: All Medigap plans provide this benefit. It covers the costly daily hospital copays that you begin collecting after your 60th day in the hospital.
Medicare Part B coinsurance: Each supplement also covers this benefit, which is an important one. Medicare only covers 80% of your Part B outpatient expenses, so this benefit is what pays the remaining 20% for you.
Blood (First 3 pints): This benefit is on all supplements and pays for the first 3 pints of blood in a blood transfusion. Since blood is very expensive, this is a great benefit. Medicare just pays the 4th pint and above.
Part A Hospice care coinsurance: Under this benefit, Medicare supplements pay for the parts of hospice care that Medicare doesn’t. Costs acquired by you are usually nothing.
Skilled Nursing Facility coinsurance: Medicare grants 100 days of skilled nursing facility (SNF) care after you’ve been hospitalized and need care as you recover. Medicare only pays for the first 20 days, but a policy with SNF coverage will pay for the other 80 days.
Medicare Part A deductible: This is $1,408 in 2020. You can pay this multiple times per year, if for example, you have two inpatient hospital stays that are more than 60 days apart.
Medicare Part B deductible: This is $198 per year in 2020. You’ll pay the Part B deductible once per year for doctor’s visits, physical therapy, or lab-work unless your Medicare supplement offers this benefit.
Medicare Part B excess charges: Medicare providers can either approve Medicare’s designated rates for each service or they can charge you an excess charge, if they choose.
Foreign travel emergency: Medicare itself doesn’t offer you coverage outside the U.S. But, some Medicare supplements feature a foreign travel benefit that will pay 80% of your costs up to $50,000 after a small deductible.
Choosing a Medicare Supplement
Medigap plans are standardized, so you’ll know which benefits you’re purchasing. However, there are many things that you’ll want to know about each insurance company before you choose your supplement:
Rates – A supplement premium is the monthly rate you pay to the insurer that provides your coverage. Identify the premium that each insurer will charge you, and see if it’s competitive with other Medigap insurers in your area.
Rate trend history – Most policies will showcase an annual rate increase to contend with medical inflation. Find out the kind of rate increases the carrier has had over the past 3 years. Compare these to the carrier’s competitors.
Financial ratings – Certain companies provide reports, or grades, on the fiscal health and stability of the insurance carrier. Ask your Medicare agent what the A.M. Best and Weiss Ratings are for each insurer, then consider this information when making your decision.
You can get a breakdown of which Medigap insurance carrier has the best pricing, financial rating, rate trend history. For all your Medigap inquiries, call Cornerstone Senior Advisors at (316) 260-3331.