Medicare Supplement Plans
MEDICARE SUPPLEMENT INSURANCE (MEDIGAP POLICY)
What is a Medigap policy?
A Medigap policy (also called “Medicare Supplement Insurance”) is private health insurance that is designed to supplement Original Medicare. This means it helps pay some of the health care costs (“gaps”) that Original Medicare doesn’t cover (like copayments, coinsurance, and deductibles). If you have Original Medicare and a Medigap policy, Medicare will pay its share of the Medicare-approved amounts for covered health care costs. Then your Medigap policy pays its share. A Medigap policy is different from a Medicare Advantage Plan (like an HMO or PPO) because those plans are ways to get Medicare benefits, while a Medigap policy only supplements your Original Medicare benefits. Note: Medicare doesn’t pay any of the costs for you to get a Medigap policy.
Some Medigap policies also cover certain benefits Original Medicare doesn’t cover. Medigap policies don’t cover your share of the costs under other types of health coverage, including Medicare Advantage Plans, stand-alone Medicare Prescription Drug Plans, employer/union group health coverage, Medicaid, Veterans Administration (VA) benefits, or TRICARE. Insurance companies generally can’t sell you a Medigap policy if you have coverage through Medicaid or a Medicare Advantage Plan.
Every Medigap policy must follow Federal and state laws designed to protect you, and the policy must be clearly identified as “Medicare Supplement Insurance.” Medigap insurance companies in most states can only sell you a “standardized” Medigap policy identified by letters “A” through “N”. Each standardized Medigap policy must offer the same basic benefits, no matter which insurance company sells it. Cost is usually the only difference between Medigap policies with the same letter sold by different insurance companies.
In some states, you may be able to buy another type of Medigap policy called Medicare SELECT. SELECT plans are standardized plans that may require you to see certain providers and may cost less than other plans.
What types of Medigap policies can insurance companies sell?
In most cases, Medigap insurance companies can sell you only a “standardized” Medigap policy. All Medigap policies must have specific benefits so you can compare them easily.
The federal government has named 10 different Medigap plans, with letters from “A” to “N”. (These letters have no relationship to the Medicare Part A, B, C, and D designations.) The different types vary in which gaps in coverage they fill. To keep it simple, all policies with the same letter offer the same benefits. Not all plans are available in all states. Call your state insurance department for detailed descriptions of these plans.
Insurance companies selling Medigap policies are required to make Plan A available. If they offer any other Medigap plan, they must also offer either Medigap Plan C or Plan F. Not all types of Medigap policies may be available in your state. Plans D and G effective on or after June 1, 2010, have different benefits than D or G Plans bought before June 1, 2010. Plans E, H, I, and J are no longer sold, but, if you already have one, you can keep it. Plan N requires Part B copays to cover office visits and trips to the emergency room. Plans K and L use coinsurance to split costs between you and the insurance company until you reach your out-of-pocket limit.
Some companies offer high deductible versions of Plan F. With these plans, you’ll pay the plan’s deductible first, before the plan begins covering any of your expenses. Plans C and F pay the Medicare Part B deductible.
As a general rule, the more generous the coverage, the higher the premium. Even for exactly the same coverage, however, premiums for Medigap policies can vary widely from insurer to insurer. Your Medigap premiums may also rise over time, after you’ve bought the policy.
What Medigap policies don’t cover.
Generally, Medigap policies don’t cover long-term care (like care in a nursing home), vision or dental care, hearing aids, eyeglasses, and private-duty nursing.
Types of coverage that are NOT Medigap policies.
1) Medicare Advantage Plans (Part C), like an HMO, PPO, or PFFS plans
2) Medicare Prescription Drug Plans (Part D)
3) Medicaid
4) Employer or union plans, and the (FEHBP) program
5) TRICARE
6) Veterans’ benefits
7) Long-term care insurance policies
8) Indian Health Service, Tribal, and Urban Indian Health plans
What do I need to know if I want to buy a Medigap policy?
1) You must have Medicare Part A and Part B to buy a Medigap policy”.
2) If you have a Medicare Advantage Plan, you can apply for a Medigap
policy, but make sure you can leave the Medicare Advantage Plan before
your Medigap policy begins.”
3) Plans E, H, I, and J are no longer for sale, but you can keep these plans
if you already have one.
4) You pay the private insurance company a monthly premium for your
Medigap policy in addition to the monthly Part B premium that you pay
to Medicare.
5) A Medigap policy only covers one person. If you and your spouse both
want Medigap coverage, you each will have to buy separate Medigap
policies.”
6) You can buy a Medigap policy from any insurance company that’s
licensed in your state to sell one.”
7) If you want to drop your Medigap policy, contact your insurance company
to cancel the policy.”
8) Any standardized Medigap policy is guaranteed renewable even if you
have health problems.This means the insurance company can’t cancel
your Medigap policy as long as you pay the premium.”
9) Although some Medigap policies sold in the past cover prescription drugs,
Medigap policies sold after January 1, 2006, aren’t allowed to include
prescription drug coverage.”
10) If you want prescription drug coverage, you can join a Medicare
Prescription Drug Plan (Part D) offered by private companies approved by
Medicare.”
When is the best time to buy a Medigap policy?
The best time to buy a Medigap policy is during your Medigap open enrollment period. This period lasts for 6 months and begins on the first day of the month in which you’re both 65 or older and enrolled in Medicare Part B. Some states have additional open enrollment periods including those for people under 65. During this period, an insurance company can’t use medical underwriting. This means the insurance company can’t refuse to sell you a Medigap policy, can,t charge you more for a Medigap policy ( even if you have pre-existing conditions) and cant make you wait for coverage.
What if I wait till after my Medigap Open Enrollment period to enroll.
While the insurance company can’t make you wait for your coverage to start, it may be able to make you wait for coverage if you have a pre-existing condition. A pre-existing condition is a health problem you have before the date a new insurance policy starts. In some cases, the Medigap insurance company can refuse to cover your out-of-pocket costs for these pre-existing health problems for up to 6 months. This is called a “pre-existing condition waiting period.” After 6 months, the Medigap policy will cover the pre-existing condition. Coverage for a pre-existing condition can only be excluded in a Medigap policy if the condition was treated or diagnosed within 6 months before the date the coverage starts under the Medigap policy. After this 6-month period, the Medigap policy will cover the condition that was excluded. Remember, for Medicare-covered services, Original Medicare will still cover the condition, even if the Medigap policy won’t cover your out-of-pocket costs, but you’re responsible for the coinsurance or copayment.
If you have a pre-existing condition and you buy a Medigap policy during your Medigap open enrollment period and you are replacing certain kinds of health coverage that counts as “creditable coverage,” it’s possible to avoid or shorten waiting periods for pre-existing conditions. Prior creditable coverage is generally any other health coverage you recently had before applying for a Medigap policy. If you have had at least 6 months of continuous prior creditable coverage, the Medigap insurance company can’t make you wait before it covers your pre-existing conditions.
There are many types of health care coverage that may count as creditable coverage for Medigap policies, but they will only count if you didn’t have a break in coverage for more than 63 days.
Talk to your Medigap insurance company. It will be able to tell you if your previous coverage will count as creditable coverage for this purpose. You can also call your State Health Insurance Assistance Program.
If you buy a Medigap policy when you have a guaranteed issue right (also called “Medigap protection”), the insurance company can’t use a pre-existing condition waiting period.
Note: If you’re a person with Medicare under 65 and have a disability or ESRD, you might not be able to buy the Medigap policy you want, or any Medigap policy, until you turn 65. Federal law doesn”t require insurance companies to sell Medigap policies to people under 65. However, some states require Medigap insurance companies to sell you a Medigap policy, even if you’re under 65.
Why is it important to buy a Medigap policy when I am first eligible?
It’s very important to understand your Medigap open enrollment period. Medigap insurance companies are generally allowed to use medical underwriting to decide whether to accept your application and how much to charge you for the Medigap policy. However, if you apply during your Medigap open enrollment period, you can buy any Medigap policy the company sells, even if you have health problems, for the same price as people with good health. If you apply for Medigap coverage after your open enrollment period, there is no guarantee that an insurance company will sell you a Medigap policy if you don’t meet the medical underwriting requirements, unless you’re eligible because of one of the limited situations listed in the next paragraphs.
It’s also important to understand that your Medigap rights may depend on when you choose to enroll in Medicare Part B. If you’re 65 or older, your Medigap open enrollment period begins when you enroll in Part B and can’t be changed or repeated. In most cases, it makes sense to enroll in Part B when you’re first eligible, because you might otherwise have to pay a Part B late enrollment penalty.
However, if you have group health coverage through an employer or union, because either you or your spouse is currently working, you may want to wait to enroll in Part B. This is because employer plans often provide coverage similar to Medigap, so you don’t need a Medigap policy. When your employer coverage ends, you will get a chance to enroll in Part B without a late enrollment penalty which means your Medigap open enrollment period will start when you’re ready to take advantage of it. If you enrolled in Part B while you still had the employer coverage, your Medigap open enrollment period would start, and unless you bought a Medigap policy before you needed it, you would miss your open enrollment period entirely.
Comparing Medigap costs.
As discussed on the previous pages, the cost of Medigap policies can vary widely. There can be big differences in the premiums that different insurance companies charge for exactly the same coverage. As you shop for a Medigap policy, be sure to compare the same type of Medigap policy, and consider the type of pricing used. For example, compare a Medigap Plan C from one insurance company with a Medigap Plan C from another insurance company.
You can also find out which insurance companies sell Medigap policies in your area by visiting www.medicare.gov and selecting “Health & Drug Plans.”
The cost of your Medigap policy may also depend on whether the insurance company does any of the following:
1) Offers discounts (such as discounts for women, non-smokers, or people who are married; discounts for paying annually; discounts for paying your premiums using electronic funds transfer; or discounts for multiple policies).
2) Uses medical underwriting, or applies a different premium when you don”t have a guaranteed issue right, or aren”t in a Medigap Open Enrollment period.
3) Sells Medicare SELECT policies that may require you to use certain providers. If you buy this type of Medigap policy, your premium may be less.
4) Offers a “high-deductible option” for Medigap Plan F. If you buy Medigap Plan F with a high-deductible option, you must pay the first $2,240 (in 2018) of deductibles, copayments, and coinsurance not paid by Medicare before the Medigap policy pays anything. You must also pay a separate deductible ($250 per year) for foreign travel emergency services.
5) If you bought your Medigap Plan J before January 1, 2006, and it still
covers prescription drugs, you would also pay a separate deductible ($250
per year) for prescription drugs covered by the Medigap policy.
Step-by-Step Guide to Buying a Medigap Policy.
Buying a Medigap policy is an important decision. Only you can decide if a Medigap policy is the way for you to supplement Original Medicare coverage and which Medigap policy to choose. Shop carefully. Compare available Medigap policies to see which one meets your needs. As you shop for a Medigap policy, keep in mind that different insurance companies may charge different amounts for exactly the same Medigap policy, and not all insurance companies offer all of the Medigap policies.
Below is a step-by-step guide to help you buy a Medigap policy.
STEP 1: Decide which benefits you want, then decide which of the Medigap
Plans A through N meet your needs.
STEP 2: Find out which insurance companies sell Medigap policies in your
state.
STEP 3: Call the insurance companies that sell the Medigap policies you’re
interested in and compare costs.
STEP 4: Buy the Medigap policy if it meets your needs and your budget.
Watch out for illegal insurance practices.
It’s illegal for anyone to do the following:
1) Pressure you into buying a Medigap policy, or lie to or mislead you to switch from one company or policy to another.
2) Sell you a second Medigap policy when they know that you already have one, unless you tell the insurance company in writing that you plan to cancel your existing Medigap policy.
3) Sell you a Medigap policy if they know you have Medicaid, except in certain situations.
4) Sell you a Medigap policy if they know you’re in a Medicare Advantage Plan (like an HMO, PPO, or Private Fee-for-Service Plan) unless your coverage under the Medicare Advantage Plan will end before the effective date of the Medigap policy.
5) Claim that a Medigap policy is part of the Medicare Program or any other Federal program. Medigap is private health insurance.
6) Claim that a Medicare Advantage Plan is a Medigap policy.
7) Sell you a Medigap policy that can’t legally be sold in your state. Check with your State Insurance Department to make sure that the Medigap policy you’re interested in can be sold in your state.
8) Misuse the names, letters, or symbols of the U.S. Department of Health & Human Services (HHS), Social Security Administration (SSA), Centers for Medicare & Medicaid Services (CMS), or any of their various programs like Medicare. (For example, they can’t suggest the Medigap policy has been approved or recommended by the Federal government.)
9) Claim to be a Medicare representative if they work for a Medigap insurance company or sell you a Medicare Advantage Plan when you say you want to stay in Original Medicare and buy a Medigap policy. A Medicare Advantage Plan isn’t the same as Original Medicare. If you enroll in a Medicare Advantage Plan, you will be disenrolled from Original Medicare and can’t use a Medigap policy.