health insurance

Understanding Medicare Supplemental Health Insurance

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You’ve heard plenty about Medicare—the federally funded health insurance program for individuals 65 years of age and older, qualifying people with disabilities, and patients with End-Stage Renal Disease. Like with most insurance policies, Medicare doesn’t cover all expenses; there are still deductibles, co-payments, and coinsurance fees involved. That’s where purchasing a Medicare Supplemental Health Insurance policy can benefit you.

What is Medicare Supplemental Health Insurance?

Medicare Supplemental Health Insurance—sometimes called Medigap—is a type of health insurance policy sold by private companies to help cover the costs that your Medicare plan doesn’t pay for. This is different from a Medicare Advantage Plan, which replaces Original Medicare. A Medigap plan, on the other hand, supplements Original Medicare.

Medigap policy holders pay a monthly premium for coverage; this is in addition to any Part B premiums paid to Medicare. One nice thing about most Medigap policies is that you’re guaranteed renewal regardless of your health condition, as long as you pay your premiums on time.

What Does it Cover?

While a Medigap insurance policy will help cover gaps in your Medicare plan, it can’t cover everything. For example, a Medicare Supplemental policy doesn’t cover prescription drugs. If you want that coverage, you will have to join a Medicare Prescription Drug Plan, which is Part D of Medicare coverage. In addition, they rarely cover things like vision care, dental care, or long-term care.

The gaps it does help cover include fees like copayments, coinsurance, and deductibles. Depending on your Medigap policy, you may also be eligible for care when you travel abroad.

Who Does It Cover?

Not everyone on Medicare is eligible for a Medicare Supplemental plan. To be eligible, you must already have Medicare Part A—which covers hospital stays—and Part B—which covers doctors’ services.

You cannot have a Medicare Advantage Plan, such as a Medicare Medical Savings Account (MSA) Plan, as these plans do not work together with a Medigap policy. In fact, it’s illegal for an insurance provider to sell you Medigap coverage if you’re under a Medicare Advantage Plan.

Note that each plan only covers one person, so if both you and your spouse want to sign up for a Medigap plan, you will each have to purchase separate coverage.

What Should You Know About Medigap Plans?

Before you sign up for a Medigap insurance policy, there are several additional things you should know:

  • Your enrollment period lasts six months from the first day of the month you turn 65 (if you are signed up for Medicare Part B) or within six months of signing up for Medicare Part B. If you enroll in a Medigap policy during this time, you will pay the same price as someone in good health. If you enroll outside of this window, there’s no guarantee of coverage or low rates.
  • If you decide to change your Medicare Supplemental policy outside of your enrollment period, you are subject to medical underwriting, which may increase your rates. However, California features a “birthday rule” that allows you to change your coverage within 30 days of your birthday each year without medical underwriting. Changes must be of equal or lesser coverage than your original plan.
  • Medigap plans are categorized by letters A through N, although new subscribers are not eligible for plans E, H, I, or J. Plans of the same letter offer the same benefit no matter the provider, but the prices may vary depending on the company and location.

While Medicare Supplemental plans don’t fill all the gaps in Medicare coverage, these policies are great ways to avoid copayment, coinsurance, and deductible fees. When you weigh the financial aspects of your medical care, this could end up being a smart financial decision. Will you consider a Medicare Supplemental Health Insurance plan?

AdminUnderstanding Medicare Supplemental Health Insurance