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Medicare Supplement Basics
Original Medicare, Parts A and Part B, covers a lot, but it’s important to note that it comes with out-of-pocket costs you may have to pay. Adding Medicare Supplement Insurance coverage, also called Medigap insurance, can help pay for out-of-pocket costs that come with Original Medicare coverage. This includes such things as coinsurance, copayments, and deductibles, giving beneficiaries peace of mind at all times.
Medicare Supplement plans are designed to work together with Medicare Part A and Part B. It’s important to note that this differs from Medicare Advantage plans, which completely replace your Medicare benefits with full private coverage. Medicare Supplement plans allow you to continue receiving Medicare benefits while helping pay for out-of-pocket costs left behind by Parts A and B.
Medicare Supplement Benefits
Medicare Supplement insurance plans come in all shapes and sizes (in terms of the basic benefits), but each lettered plan type must include the same standardized basic benefits. That is true regardless of the insurance company and/or the location. For example, a Medicare Supplement Plan G in Texas includes the same basic benefits as a Plan G in Virginia. Because of this, Medigap policy holders are able to see any doctor who accepts Medicare patients, even including those out of state. Medigap coverage also travels with you anywhere you go in the United States and is guaranteed renewable for life if the premiums are paid on time.
The only difference to that general rule is that if you live in Wisconsin, Minnesota or Massachusetts, your Medicare Supplement insurance plan options will be different than in other states. Medicare Supplement insurance plans can vary, but must all cover at least a portion of the following benefits:
Some plans may also help cover Medicare Part A and B deductibles, along with preventive care coinsurance, foreign travel emergency care, Skilled Nursing Facility care coinsurance and Part B excess charges. Please check plan documents for full details. Note that Medicare Supplement Plans C and F are not available to beneficiaries who became eligible on or after Jan. 1, 2020.
Medicare Supplement Costs
Private insurance companies are required to offer the same basic benefits for each lettered Medicare plan as described above, but they do have the ability to charge different premiums. Generally, plans have premiums priced in any of the following ways:
It’s important to note that no matter what method an insurance company uses to price plans, premiums may increase over time for other reasons, such as inflation.
Medicare Supplement Eligibility & Enrollment
In order to be eligible to enroll in a Medicare Supplement plan, you must first be enrolled in both Medicare Part A and Part B. Remember, the purpose of Medigap (Medicare Supplement) is to help pay for out-of-pocket costs associated with Original Medicare. Your Medigap Open Enrollment Period (OEP) begins on the first day of the month that you are both age 65 or older and enrolled in Part B, and lasts for six months from that date. So for example, if you turn 65 in June but don’t start Medicare B until mid-October, your Medigap Open Enrollment Period will begin on November 1 and end May 1.
During this OEP, you are able to join any Medicare Supplement insurance plan that is available where you live. You will not be denied coverage based on any pre-existing conditions* during this enrollment period, although in some cases a waiting period may apply. If you miss this OEP and try to enroll at some point in the future, it is possible you may be denied benefits or charged a higher premium. Finally, in some states, it is possible that you may be able to enroll in a Medicare Supplement plan before the age of 65.
*Pre-existing conditions are defined as health conditions that existed before the start date of a policy—they may limit coverage that is available, be excluded from coverage specifically, or completely prevent you from being approved for a policy. The definition of the limitation or the exclusion of coverage varies with each plan, so always check a plan’s official document.
Why Should You Consider Medicare Supplement Insurance?
Having a Medicare Supplement (Medigap) plan complements your Original Medicare benefits and helps to protect you from unexpected costs and the worry of paying them. Because of the guaranteed acceptance during Medigap OEP, it’s also a great option for those that have pre-existing conditions. Finally, it allows you to continue to receive the federal Medicare benefits that you have been contributing towards throughout your career. The primary advantages of Medicare Supplement (Medigap) are:
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