Although Original Medicare provides critical coverage for many healthcare services, beneficiaries are responsible for deductibles and co-insurance and there is no cap to your yearly expenses. Medicare Supplement insurance – sometimes referred to as “Medigap” insurance – can help cover these costs.
Supplemental insurance is sold by private companies, and covers some or all of the Original Medicare deductibles and co-insurance. When you are enrolled in a Medicare Supplement plan, Original Medicare is your primary insurance, and your supplement will pay secondary.
Choosing a Policy
Just like Medicare Advantage plans, Medicare Supplements are regulated by state and federal laws to ensure consistency and also to protect consumers.
Supplemental insurance is designated by letters A through N, and each “letter” policy is standardized, which makes it easier to compare policies.
Medicare Supplement Plans
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Medicare Supplement policies require the payment of Medicare Part B premium (and Part A premium if you have one). Every Medicare Supplement policy has a monthly premium and the premiums associated with the policies can vary among insurance companies. That means that different insurance companies may charge different premiums for the same policy. The cost of the premium may depend on where you live, your age, your gender, whether you smoke, medical conditions, and whether the insurance company offers any other discounts for paying electronically, or for more than one policy in the household, or if they have a high-deductible option. When comparing prices, be sure you’re comparing policies with the same letter designation – for instance, compare an A policy with another A policy, not an F policy.
Each letter policy covers different amounts of the Original Medicare costs and has different copays and coinsurance, so you can choose the plan that works best for your needs and budget. Medicare Supplements do not have a network of doctors, you can go to any doctor that is willing to accept Original Medicare. In addition, some states offer an option known as Medicare SELECT. SELECT policies require subscribers to use specific healthcare providers and hospitals for non-emergency care, in order to obtain full coverage. Because of these restrictions, costs can be lower. Men and women who opt for SELECT policies have the right to switch to a standard Medicare policy within 12 months of enrolling for SELECT.
When Can You Enroll?
There are enrollment timeframes and qualifications for Medicare Supplement plans. Medicare Supplement insurance companies are generally allowed to use medical underwriting to decide whether to accept your application and how much to charge you for the plan, unless you enroll during your initial open enrollment period or you qualify for a “guaranteed issue”.Your open enrollment period begins on the first day of the month in which you’re both 65 or older and enrolled in Medicare Part B.(Some states may offer plans for people under age 65 and enrolled in Part B.)
In most cases, you have guaranteed issue rights for the following:
•You lose other health care coverage.
•You are in your Medicare Advantage trial period and change your mind.
•Oregon “Birthday Rule” allows you to switch from one Medigap plan to another with same or lesser benefits, for 30 days starting on your birthday.
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