Medicare Supplemental Insurance or Medigap insurance?
What Is It and Is It Right For You?
First, the terms “Medicare Supplemental Insurance” and “Medigap Insurance” are essentially the same thing. The insurance industry typically uses “Supplement,” and the government typically uses “Medigap.” But what are they? They are insurance plans that you can purchase to cover the expenses that Medicare Parts A & B do not. Medicare is your primary payor with the plan being secondary. Medicare covers many expenses, but not all. Because you are responsible for these “gaps” in coverage, the plans can be referred to as gap coverage. If you only have Medicare Parts A & B, these are the costs you would be responsible for (based on 2023):
- Part A Hospital Deductible of $1,600 per benefit period (days 1-60);
- Part A Hospitalization costs (days 61-90) of $400 per day;
- Part A Hospitalization costs (days 91 – 150) of $800 per day;
- Part B Annual Deductible of $226 for 2023; then 20% of the Medicare-approved amount for most outpatient services and medical supplies, with no cap on your potential expenses…;
- The cost of the first 3 pints of blood;
- Skilled Nursing Facility Care (rehab unit) $200 per day (days 21-100) and 100% of cost beyond day 100.
What’s covered by Medicare Parts A & B?
Part A covers: Hospital Care, Skilled Nursing Facility Care, Home Healthcare Services, Hospice
Part B covers: “Welcome to Medicare” exam, Annual Wellness exam, Outpatient Services, Lab tests, Medical Equipment, Mental Healthcare, Ambulance services
As you can imagine, the costs of an extended hospital stay or skilled nursing facility can add up quickly. For example, 100 days in a skilled nursing facility can cost you $16,000! Also, most chemotherapy and radiation treatments are covered under Part B, requiring you to pick up the tab of 20% of these costs. Unfortunately, there is no stop-loss for your Part B expenses, leaving them as a potential unknown.
Purchasing Medicare Supplemental Insurance
To cover some or all of these expenses, you can buy Medicare supplemental insurance coverage from private insurance companies. There are 12 different standardized plans, labeled A – D, F, high-deductible F&G, and K – N. Plans C & F are also available as Select plans. Plans C & F cover 100% the expenses that Medicare doesn’t, as long as they are Medicare-covered services (Now only avaliable for those with Part A effective dates prior to Jan 1,2020). The other plans offer different levels of coverage and usually satisfy everyone’s needs and budget. They allow you to see any doctor or hospital as long as they are set up in the Medicare system. Select plans C & F require you to use a hospital from the “select” list for non-emergency services. People like them because they are easy to use with virtually no paperwork. Also, they typically move with you if you are thinking of retiring in a different area. Even though Medicare typically doesn’t cover you outside the country, some plans will include a foreign travel emergency benefit. These plans are sold year-round, but some restrictions may apply. Medicare requires the insurance companies to accept you with no underwriting within six months of your 65th birthday.
Because outpatient prescription drug coverage is not covered by a Medicare supplemental insurance plan, you will want to purchase a plan separately. Some people may be eligible for drug coverage through the VA.
Which is better: Medicare Supplemental Plan or Medicare Advantage Plan?
Different strokes for different folks.
A Medicare Supplemental Insurance Plan can offer ease of use because there are no network limitations other than verifying the doctor/facility are participating in Medicare, and you can use it in any of the 50 states without checking in with the plan. But all plans do have a monthly premium starting as low as $46/month and going up from there to about $250 or more. (Costs vary to plan, age, area, health & tobacco status)
A Medicare Advantage Plan can be great for someone that doesn’t use many medical services as you only pay for the services you receive. Many plans can be had for as little as $0 monthly premium. However, almost all plans (with the exception of PFFS plans which are not very popular anymore) have networks, so to get the lowest costs, you will want to use in-network doctors/facilities. HMO’s almost always require you to use in-network providers, except in the case of a life-threatening medical emergency. Also, many services require prior authorization, and many HMO’s require referrals to see specialty doctors. But, they do come with extras you don’t get from Medicare or a Supplement, like fitness club memberships, vision, hearing, etc.
The good news is that you can try an Advantage plan for a one-year trial and if you don’t like it, Medicare will allow you to enroll in, or back into, a Medicare Supplement plan anytime during the one-year period – no questions asked. But it must be your first time on an Advantage plan, and there may be exceptions to this.
Contact Us For Your Medicare Advantage Insurance Needs
Our customer service doesn’t stop when your policy arrives in the mail. We’re there for you year after year because as your needs change, so too should your Medicare Supplemental Insurance Plans. We have met so many wonderful people in this community, and we look forward to meeting with you. Contact us today by completing our easy online request form. Give us the opportunity to work for you. You’ll be glad you did!
Consultation is Free
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