Medicare Supplement Plans

If you’re getting close to your 65th birthday, you’re likely preparing to enroll in Medicare. Enrolling in Medicare and figuring out how to decrease your out-of-pocket health care expenses can be daunting, but there are a lot of resources available (including your local insurance agent) who can help. As you make your enrollment decision, be sure to consider a Medicare supplement plan, which can save you money and provide peace of mind.

Original Medicare

Original Medicare, which consists of Medicare Part A (hospital insurance) and Part B (medical insurance), typically does not cover all of an individual’s health care costs. In order to fill the gap, many individuals purchase a Medicare supplement plan. Medicare supplement plans, also known as Medigap policies, are policies that can be purchased to cover expenses that Medicare does not pay.

Medicare Advantage Plan

If you enroll in a Medicare Advantage Plan (Part C), you cannot use a Medigap policy to pay your Medicare Advantage Plan copayments, deductibles, and premiums. A Medicare Advantage Plan includes both hospital and medical insurance, and unlike Original Medicare, coverage is not provided by Medicare but by a private insurance company approved by Medicare.

Prescription Drug Coverage

If you enroll in Original Medicare, you will need to choose a Medicare Prescription Drug Plan (Part D). This coverage is provided by private insurance companies approved by Medicare.

If you enroll in a Medicare Advantage plan, and your plan provider offers prescription drug coverage, you will probably need to purchase the coverage through your plan provider.

What Medigap Covers

The most common supplemental plans provide coverage for your out-of-pocket expenses not paid by Medicare, such as copays, deductibles, coinsurance, as well as some services that may not be covered by Medicare, such as international travel emergencies. Plans vary, so look for a plan that provides the coverage you need.

Where to Purchase

Medicare supplement plans are sold by private insurance companies, and you will usually pay a monthly premium. Insurance companies selling Medicare supplement plans do not need to adhere to the requirements for standard Medicare policies. This means that the cost of Medicare supplement plans can vary due to a number of factors, including the plan’s service area, the age you were when enrolling in Medicare or the age you currently are when enrolling in a Medicare supplement plan. Because premiums and out-of-pocket costs can vary, it is a good idea to shop around to ensure you find the best rate and policy to suit your needs.

Eligibility

In order to be eligible for Medicare supplement plans, you must be enrolled in Medicare Part A and Part B, and you must not be enrolled in a Medicare Advantage plan. If you are under age 65 and receive Medicare as part of your disability benefits, you may be eligible to purchase a Medicare supplement plan depending on the state in which you live. In addition, only one person can be covered by each Medicare supplement plan. You will need to purchase separate policies if both you and your spouse want this type of coverage.

When to Enroll

The ideal time to purchase a Medicare supplement plan is during your Medigap open enrollment period. This is a six-month period beginning on the first day of the month that you turn age 65 or older and enroll in Medicare Part B. During this period, you will not be denied coverage for any pre-existing health conditions. In other words, you can purchase a Medicare supplement plan of your choice for the same premium that a healthy person without pre-existing conditions would pay. If you do not enroll in a Medicare supplement plan during your Medigap open enrollment period, you will not be guaranteed coverage, and you may be denied coverage or charged a higher premium due to your medical history or pre-existing health conditions.

For more information or help finding the right Medicare supplement policy for you, contact your Thams Agency representative.

Additional Resources

Medigap policy FAQs: http://www.medicare.gov/supplement-other-insurance/medigap/whats-medigap.html

Medicare supplement facts: https://www.medicare.gov/supplement-other-insurance/