A blog about Medicare. What you and your employees need to know
Medicare Stew Series –
Medicare Supplements -Like Peas and Carrots!
Author: Lora Drummond
Medicare Transition Specialist
Medicare Stew – Part 4: Medicare Supplements – Like Peas and Carrots
The Medicare Stew Series concludes with a final helping of what Medicare Supplements are. These plans complement Original Medicare – and they go together like peas and carrots!
Medicare Supplements, also called Medigap plans, are sold by private insurance companies. If Original Medicare provides only 80% coverage and you are left with 20% to pay, how can you fill or at least close this gap? Medigap plans! These plans help folks pay for some of the remaining costs, or gap, left after Original Medicare pays. They don’t add any additional benefits to what Original Medicare allows but will cover leftover costs or out-of-pocket costs like copayments, coinsurance, and deductibles. That’s why it pairs perfectly with Original Medicare!
How to Get a Supplement?
Qualifying for a Medigap plan is easy (guaranteed coverage) if you enroll when you are first eligible, either when turning 65 or leaving a qualified employer plan. Going to a Medigap later can be tricky since you will be subject to full medical underwriting (health questions) depending on the plan you want. They like you to be healthy when you enroll. You generally lose the right of a guaranteed issue when you don’t enroll when first eligible.
When you add a supplement plan to your Medicare coverage, you pay an additional premium to a private insurance company offering the plan. You will have two Medicare cards to carry to show for your medical services. The Original Medicare card is your insurance card, and the card the supplemental insurance company will send shows you have additional coverage. When Medicare is billed, it will pay its portion and automatically bill the Supplement plan for the remaining balance. There are no network restrictions to use it, and you won’t need to get specialist referrals. So the plan works anywhere in the US.
Do I need a Prescription Drug Plan?
Original Medicare does not include prescription drug coverage, so you will still need to add that as well. When a drug plan is selected, that insurance company will send a separate card to use for those services. You will carry 3 cards to provide proof of your Medicare coverage. Original Medicare + Med Supplement + Drug plan.
Plans A- N
There are 10 main types of standard Medigap policies available in most states. They are each represented by a letter, A-N, providing coverage for certain cost gaps. For example, one plan type might cover the full Part B deductible, while another plan type won’t. Premiums will be different too. Insurance companies that offer Medigap plans are standardized to those 10 Medigap types. No matter which company you choose for your plan, it will be the same coverage as any other company offering the same plan. The premiums for the plans are set by the insurance companies even though they offer standard coverage set by Medicare- so the cost of the plan is what differentiates them and, of course, the name of the insurance company on the card. Therefore, you need to do your homework before picking a plan. Compare the costs of each plan carefully.
The initial premium is based on the age, gender, and zip code of the enrolling individual. It is also based on whether or not you are a smoker. Medigap plan premiums generally increase annually.
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