Individuals who choose original Medicare (rather than a Medicare Advantage plan) often choose to purchase an additional, separate Medigap policy. Also known as a Supplemental plan, these insurance plans cover the “gaps” in original Medicare, including copayments, coinsurance and deductibles.
In most states, Medigap plans are named by letters like plan G or plan K. These lettered plans offer the same health benefits, regardless of which Medigap company you purchase them from. People with Medicare Advantage plans, offered through a private insurance company as an alternative to original Medicare, are not eligible for Medigap insurance.
Although Medicare Advantage plans often cost less in premiums than the original Medicare, the network for a Medicare Advantage plan is usually smaller and you may need prior authorization or a referral to this specialist.
What Medigap Covers
- 100% of Medicare Part A: Hospitals, skilled Nursing facility care, hospice care coinsurance or copayment and home health care and hospital costs.
- Some or all of Medicare Part B: services from Doctors and other medical professionals coinsurance or copayments.
- Blood for transfusions (the first three pints).
- All or part of the skilled Nursing facility care coinsurance.
- Part A and Part B deductibles.
- Foreign travel emergency costs.
Purchase Medigap During the Open Enrollment Period
If you decide to purchase a Medigap plan, you must do so during the seven-month period that begins three months before you turn 65, includes your birth month and ends three months after you turn 65. If you purchase the plan outside of this time frame, the insurer may make you wait for six months before covering preexisting health conditions, and the plan may be much more costly.
Outside of the Medigap open enrollment period, if you have health coverage changes, such as if you lose your employer-offered health care or if you move out of your current policy’s service area, guaranteed issue rights require that an insurance company must sell you a Medigap policy, cover all of your preexisting health conditions and not charge you more for the policy based on your health status.
Choosing Between Medigap Plans
You’ll want to think about your lifestyle when deciding which policy makes sense for you. For example, if you often travel internationally, you’ll want to consider Plans D, G, M and N, covering 80% of your costs during a foreign travel emergency.
Lower Monthly Premiums
On the other hand, Plans K, L and M have lower monthly premiums but will cost you more in copays and deductibles. Therefore, these plans are probably best for people in good health with a higher reserve of expendable money in a case of a health crisis. Plans K and L are also the only Medigap plans with out-of-pocket limits.
“You need to understand what the benefits and costs that are offered by those plans are,” says Casey Schwarz, senior Counsel, education and federal policy at MedicareRights.org. “There are good charts out there that explain these things.”
However, the information in those charts isn’t enough, by itself, to make the best decision, she says. “You also need to know information about yourself. You need to know or think about what your risk Tolerance is, where do you fall on the sort of a Spectrum “of paying more in monthly premiums and less for copays and deductibles when you see a doctor. and self-insure against out-of-pocket costs. ” She emphasizes that there will not be one correct choice for everyone.
Experts recommend considering your potential coverage needs should a health issue arise. It’s not wise to just think about your current health state when making an important decision regarding health care coverage. In many states, you can’t switch to Medigap plans once you’ve chosen one, so it’s important to think about possible future scenarios now.
Choosing a Medigap Carrier
Once you’ve determined which type of policy you want, it’s time to decide which company to purchase the policy from.
Some insurance companies offer discounts to specific applicants, such as women, nonsmokers, members of a union or trade organization or married individuals. Others may lower your price if members elect to pay annually instead of monthly, use electronic funds to transfer their payments or have multiple policies with the same plan.
Be sure to compare Medigap plans that are the same type (as designated by the letter of the plan), such as comparing one Plan D to another Plan D offered by a different health plan. You can get pricing information by either calling individual insurance companies or contacting your State Health Insurance Assistance Program.
So, how do you pick which insurer to go with if the prices are roughly the same? You might want to research how the company treats its members, according to Shub Debgupta, the founder and CEO of Predict Health, a health care analytics company based in Washington, DC
“You want somebody who’s there, who can help you, answer your questions, help you understand and navigate a pretty complicated system,” Debgupta says.
Understanding Medicare SELECT
Some states offer Medicare SELECT, a form of Medigap policy with a network of Doctors and Hospitals that members must stay within to be covered. These policies might cost less than other Medigap policies because they’re more restrictive regarding who you can see. The network of healthcare providers might be quite small.
“Medicare SELECT is a product like Medigap, but it has a network,” explains Schwarz.