There are policies available which supplement Medicare Parts A & B. These are called 'Medicare Supplement' (sometimes also referred to as Medigap plans) and help you pay for certain Medicare costs. This article provides an overview of Medicare Supplement policies. Make sure to read the other articles in this category as well for better understanding.
Medicare Supplement (Medigap) - An Overview
As the words ‘Medicare Supplement' indicate, these policies add on to your Part A and Part B coverage by helping you pay for many of the out-of-pocket Medicare costs incurred such as copayments, coinsurance, and deductibles. They do NOT work with Medicare Advantage plans and it is almost always illegal to have both in effect at the same time.
Though Medicare Supplement policies are sold by private insurance companies and not directly managed by CMS, there are Medicare regulations and guidelines these plans have to follow. Medicare Supplement plans are standardized into various types indicated by letters A-N. Coverage offered by a specific type of plan is identical, irrespective of carrier.
Note that some Plan types may no longer be available. Also, Medicare Supplement plan types are different for residents of Massachusetts, Minnesota, and Wisconsin.
Medicare Supplement policies usually do not cover any additional health benefits (there are exceptions like foreign travel emergency care). Instead, they mostly help pay for certain costs you may incur with Medicare Part A and Part B e.g. deductibles, copays/ coinsurance, and hospital and skilled nursing facility costs after you have used up your Medicare-covered days.
Medicare Supplement does not offer prescription drug coverage and does not cover long term care, dental care, vision care, hearing aids, eyeglasses or private duty nursing.
Carriers can refuse to sell you a Medicare Supplement policy, or charge a higher premium, based on your health condition. However, they cannot do this during your Medicare Supplement Open Enrollment Period (OEP) when you have 'guaranteed issue' rights.
You can enroll in a Medicare Supplement plan if you have Medicare Part A and Part B. You usually cannot have Medicare Advantage as well as Medicare Supplement at the same time but can switch from one to the other.
Your Medicare Supplement Open Enrollment Period (OEP) starts on the first day of the month you are at least 65 and are enrolled in Part B. It lasts for six months. This may be the best time for you to buy a Medicare Supplement policy since you will have 'guaranteed issue' rights. Even if your health is not good, the insurance company cannot refuse to sell you a Medicare Supplement policy it offers, and it cannot charge you a higher premium than others irrespective of your health condition. It also cannot delay coverage of a pre-existing condition for more than six months.
You may also have 'guaranteed issue' rights during certain Special Enrollment Periods (SEPs) e.g. if your plan stops servicing your area or you move to another service area not covered by your plan.
Medicare Supplement policies come with a renewal guarantee. Carriers cannot cancel your policy if you continue paying the premiums on time. This is a useful feature to have if your health is deteriorating over time, leading to higher healthcare costs.
There is a monthly premium you pay for a Medicare Supplement policy. In addition, there may be a deductible to satisfy if you enroll in a high-deductible plan.
Some Medicare Supplement plans have maximum out-of-pocket (MOOP) limits which limit your out-of-pocket expenses. Also, there may be ‘SELECT’ policies available in your State. These policies have limited networks but charge a lower premium.
Even though coverage offered by a particular type of Medicare Supplement plan may be identical, premiums do vary by Carriers, so it is always a good idea to shop around before enrolling in a particular plan.
Note that the monthly premium of your Medicare Supplement plan may not remain the same every year. Medicare Supplement policies use one of three age-related pricing methods. Make sure you understand the pricing method used by the policy you are buying and its long-term impact.
Click here to learn more about Medicare, its various Parts, different enrollment periods and your costs.
We have also created videos to help you better understand various topics related to Medicare. Select and watch a video explaining the topic of your interest in a simple and intuitive manner.
Remember that you cannot choose just any combination of Parts and Plans. Let Lighted Road Insurance guide you step-by-step through the Medicare ecosystem and help you in selecting the right plan(s) for your needs.
Sign up for our FREE bi-weekly newsletter focused on lifestyle for the 50+. There is no obligation to enroll.
Last Updated: 01-10-2021