Some companies use strategies that eventually trap people in expensive plans by starting out with low rates, then raising their rates faster than their competitors after "buying the business". That really cheap plan can turn into a nightmare over time. That's the main reason to work with a broker in states that have few or no consumer protections because we have experience watching the rate changes.
It's important that you understand the difference between the two types of health insurance available that are based on underlying coverage of both parts of Original Medicare, Part A-Hospital and Part B-Medical.
"Medicare Advantage", are insurance plans offered by a private insurer that has a contract with Medicare. MA plans are administered by private health insurers that are overseen by the Centers for Medicaid and Medicare Services (CMS). You do not lose Medicare while their contractor is providing services during the lock-in or enrollment period. These insurance plans look and act a lot like other insurance you have either purchased as an individual or received as part of an employee benefit plan. You show your insurance card, not your Medicare card when you go to see a doctor with a Medicare Advantage plan.
Medicare Advantage plans are not the same as Medicare Supplements.
"Medicare Supplements", also known as "Medigap" plans, can be added to Original Medicare (Parts A & B). Medigap plans are not part of the Medicare program, although Medicare allows some limited access to information about payments made for Medicare covered services. When you enroll in a plan, the insurer gets shared data about your Medicare claims. If Medicare pays a bill, the Medigap plan automatically pays the same payee the balance owed according to your coverage. If Medicare declines to pay, the insurer doesn't see it and there is no payment by the supplement. The only exception to this is some rather limited coverage for foreign travel with some plans which require a manual reimbursement request.
Supplements are secondary insurance. If you have a medigap plan you must show your Medicare card if a provider requests to see your health insurance card. You might also be asked to see your Supplement card, but in Washingon and Oregon that usually means that the person asking doesn't understand how this insurance works because the insurer will get their claims notification directly from Medicare without the need for dditional billing.
The plans are named by letter. Medigap 'Plan F' closes all of the gaps. This plan is no longer available for people enrolling in Medicare for the first time after January 1, 2020.
Plans 'G' & 'N' are Plan 'F' "look alikes except they don't pay the annual Part B deductible. Plan 'N' also has cost sharing for primary care and emergency room visits, but much cheaper to use compared to the premium difference with Plan 'F' as long as you are only seeing Medicare contracted doctors. Plan 'N' possibly could be more expensive than other plans as it does not cover 'excess charges' chargeable by non-contracted doctors. Doctors that are contracted with Medicare cannot charge more than the Medicare Allowed Amount on their fee for service schedule for Part B (non-hospital) services. Non-contracted doctors can charge excess charges up to 15% above the fee schedule. This is rare.
Plans like Plan 'F' that cover the Medicare Part B deductible will be eliminated from sale for beneficiaries that are new to Medicare starting January 1, 2020. High deductible plan G and N will be available, but these high deductible plans have a poor track record of reducing costs for beneficiaries. The structure of the plans is still so simple, however, that you can still see a comparison for all plans on a single page.
Some states have special rules that expand eligibility to enroll beyond what is allowed by Medicare rules. If you live in a state that has forgone consumer pricing protections that allow some flexibility in changing plans you might not be able to. In these states, except for "Open Enrollment", when your Part B starts and somewhat rare guaranteed issue periods, you must fill out a company underwritten health questionaire that will be used to determine whether an insurer wants to accept you or not. Once in a plan, you might not be able to switch to another lower cost plan because of your claims history.
I can get you the latest list of companies and rates that are updated as often as quarterly (these rates are generally rounded and imprecise and may be outdated which are updated quarterly by state insurance commissioners. Unfortunately, the links change frequently, so I don't link to it here. I can also get you current rates including family and other discounts that you might qualify for.
Prescription drug coverage must be purchased separately if you choose a Medigap plan.
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You might want to choose a Medigap policy if:
- You have high medical expenses and you want more predictable costs than heavy use of a Medicare Advantage plan might cost.
- You like your stand alone prescription drug plan and want to keep it.
- You want to choose which doctors you see, most of the doctors in your area are contracted with Medicare (which consists between 90-96% percent of doctors), and the doctors in your area are willing to keep seeing you with Original Medicare or doctors in your area are willing to see you with Original Medicare.
- You want extremely flexible coverage anywhere in the country with predictable out of pocket costs.
- You travel a lot in the U.S.
Medigap as Secondary Coverage
Medicare supplements are not a primary coverage. That means that they only support underlying coverage and acceptance by providers is not necessary in order for them to see you or get paid for their services. In most cases the billing is handled automatically. If Medicare approves a claim then the supplement automatically pays according to the schedule on the contract depending on which plan you choose. Supplements are not the same as Medicare Advantage plans and by law cannot include prescription drug coverage.
Prescription drug coverage may be purchased separately.
In 47 states, there are 10 standardized Medigap plans available, each labeled by the letters A through N. These plans are available through private insurance companies, and insurance companies aren't required to offer all 10 plan types. However, any insurance company that sells Medicare Supplement policies must offer at least Plan A and, if they offer any other Medigap policy, must also offer either Plan C or Plan F.
Most states have up to 10 Medicare Supplement plan types available, each labeled with a different letter of the alphabet (for example, Plan A). Each of the 10 Medicare Supplement plans offers a different level of coverage, but benefits are standardized across each lettered plan type. This means that for Medigap plans of the same letter category, you'll get the exact same benefits, no matter which insurance company you purchase the plan from or where you live. For example, a Plan A in Florida will cover the same benefits as a Plan A in North Dakota.
Please note that if you live in Massachusetts, Minnesota, or Wisconsin, your Medicare Supplement insurance options are different than those available in the rest of the country. These states standardize their Medicare Supplement coverage differently than other states. For more information on Medigap coverage in Massachusetts, Minnesota, or Wisconsin, contact your state insurance department. Or, alternatively, contact Thomas Gibson Health Insurance to get personalized assistance with your Medigap questions from a licensed insurance agent.
In the rest of the United States, insurance companies can only offer Medigap coverage from among the standardized plan options. All Medicare Supplement plans offer full or partial coverage for the following basic benefits:
- Medicare Part A coinsurance costs up to an additional 365 days after Original Medicare benefits are exhausted
- Medicare Part A hospice care coinsurance or copayment
- Medicare Part B coinsurance or copayment
- First three pints of blood each year
Plans that include additional coverage, such as Plan F, may also offer a variation of the following additional benefits:
- Medicare Part A deductible
- Medicare Part B deductible
- Medicare Part B excess charges
- Skilled nursing facility care coinsurance
- Foreign travel emergency care (up to plan limits)
Medigap cannot be used to pay for costs you may have in Medicare Part C. If you enroll in a Medicare Advantage plan, you can keep your Medigap plan as long as you keep paying the monthly premium, but you won't be able to use your Medigap benefits to pay for your Medicare Advantage plan costs.
To be eligible to enroll in a Medicare Supplement plan, you must be enrolled in both Medicare Part A and Part B also known as "Original Medicare".
Some states may offer Medigap plan options to beneficiaries under 65 who qualify for Medicare because of disability or certain conditions (such as end-stage renal disease). Federal law doesn't require states to sell Medicare Supplement insurance to beneficiaries under 65. However, depending on where you live, some states may offer Medigap coverage to beneficiaries under 65; eligibility and the specific available options may vary by state. If you're a Medicare beneficiary under 65 and interested in purchasing Medicare Supplement insurance, contact your state insurance department to learn if you're eligible for Medigap coverage in your state.
Medigap Open Enrollment Period
The best time to enroll in a Medicare Supplement plan is generally during your Medigap Open Enrollment Period, which begins automatically on the first day of the month that you are both age 65 or older and enrolled in Medicare Part B. This period lasts for six months, and is a once in a lifetime event. During this time, you have guaranteed-issue rights, meaning that by law, you can join any Medigap plan offered in your service area, regardless of pre-existing conditions. Insurance cannot turn you down for coverage due to your health status if you enroll in a policy during your Medigap Open Enrollment Period. You may qualify for other guaranteed issue periods as described in Section 2 of "Medicare and You" after your Open Enrollment Period passes.
Once your Medigap Open Enrollment Period is over, you may have more difficulty joining a Medicare Supplement plan for the first time or switching plans. Insurance companies may require medical underwriting and can reject your application based on your medical status. If you can find a Medigap plan that will accept you, you may be charged higher premiums if you have pre-existing conditions.
- Your Medigap plan goes bankrupt.
- Your Medigap plan misled you or didn't follow the rules.
- You lose your Medigap coverage through no fault of your own.
- You disenrolled from your Medigap plan to enroll in a Medicare Advantage plan for the first time and change your mind within the first year. If you switch back to Original Medicare, you have a trial right to get back your original Medigap plan if your former insurance company still offers that plan. If your original Medigap plan is no longer available, you have a right to enroll in any Medigap Plan A, B, C, F, K, or L offered by an insurance company in your state.
- Some states require that insurers accept you on a guaranteed issue basis if you have a Medicare Advantage plan that includes prescription drug coverage. You must wait until the next available election period to leave your Medicare Advantage plan to enroll in this coverage as it is illegal for a company or broker to enroll you in two plans to cover the same time.
After your Medigap Open Enrollment Period has passed, you may have guaranteed-issue rights in certain situations, including (but not limited to):
The specific rules about which Medicare Supplement plans you may be able to enroll in may vary, depending on the reason you have guaranteed-issue rights.
Once you're enrolled in a Medicare Supplement plan, your plan is generally guaranteed renewable as long as you continue to pay your plan premium. This means that your Medigap insurance company can't cancel your policy because you have health problems (as long as you're paying your monthly premiums). If you cancel your policy or leave your Medigap plan on your own, it's important to understand that you may not be able to get back the same plan or may have difficulty enrolling in a different plan unless you have a situation that gives you guaranteed-issue rights.
Medicare Supplement plans generally have higher premiums and cannot include coverage for self administered prescription medications, but, they typically do a better job of controlling extraordinary or on going health care costs than Original Medicare or a Medicare Advantage plan. For example, if you have a chronic illness that requires numerous visits to providers, frequent monitoring or expensive and/or ongoing therapy then this might be the best type of plan for you. Otherwise we would probably recommend a Medicare Advantage plan with lower fixed costs and chosen with your needs in mind.
Insurance companies can price, or "rate," their Medigap plan premiums in the following ways:
- Community no-age-rated: These plans charge premiums that are the same for all plan enrollees, regardless of age
- Issue-age-rated: These plans base premiums on your age when you first enrolled in the policy. Therefore, the younger you are when you enroll in this type of plan, the lower your premium will be. Premiums don't increase with age.
- Attained-age-rated: Like issue-age-rated, these plans also base premiums on your age when you first buy the policy. However, unlike issue-age-rated plans, premiums increase as you get older.
The premium listed when you first join a Medigap plan may not necessarily be how much you'll pay later on. For example, attained-age-rated Medigap plans may be lower when you first enroll if you join the plan when you're younger. However, because premium costs increase with your age, your costs could go up considerably over time. On the other hand, community-rated and issue-age-rated Medicare Supplement plans may initially have higher premiums, but these costs don't increase as you get older, so your costs may end up being lower overall over time.
Is Medigap Right for You?
Consider these facts in deciding if Medicare Supplement insurance for hospital and medical coverage is right for you:
- Medicare does not cover all health care bills.
- Medicare has deductibles and co-payments for some services.
- The insured is responsible for paying the costs of services not covered by Medicare.
- There is no limit to how much you can pay with just Original Medicare.
- Medicare might not cover all your preventive needs as well as a Medicare Advantage plan
- Medicare is a federal program and Medigap plans are secondary insurance. Your Medigap plan works whenever and wherever Medicare accepts and pays the bill for Medicare services. However, Medigap does not add new coverage for claims that Medicare will not pay. Medigap plans always follow Medicare and in general doesn't expand your coverage any wider than what Medicare allows.
- Medicare Supplement plans generally let you use any provider that accepts Medicare. Some states sell Medicare SELECT plans, which is a type of Medigap plan that requires members to use in-network providers. If you're enrolled in a Medicare SELECT plan, be sure to use the plan's network providers to be covered by the plan (although you'll be covered for emergency or urgent care).
- Keep in mind that Medigap plans don't cover benefits like routine vision or dental, hearing, or wellness programs. You may be able to get coverage for some of these items through a Medicare Advantage plan.
Medicare supplement plans (also called Medigap) help cover the "gaps" in insurance that Original Medicare (Parts A and B) do not cover. The plans are named by letter, Plan A through Plan N. The plan benefits are standardized, meaning Plan A benefits are exactly the same from one company to another.
In Conclusion: Important Medigap Facts
- Medicare Supplements rely on the underlying coverage of both parts of Original Medicare (Part A and Part B) and fills gaps in coverage. You cannot have a Medicare Supplement and Medicare Advantage coverage at the same time. When you enroll in a Medicare Advantage plan, Medicare switches your coverage to the contracted insurance carrier. Your Original Medicare cannot pay claims during the annual enrollment period of the Medicare Advantage plan. Remember, unless Medicare pays a claim, neither does the supplement.
- Medigap plans have been standardized by federal and state law. Standardized plans are designated by the letters A through N. Standardized means that no matter who you buy the plan from it will be the same.
- You can change Medigap plans at any time if you health qualify. Health qualify means answer no to a list of health questions and if being treated for a chronic illness being stable on the same medication for 2 years. We represent several carriers and can get coverage for 95% of the people that we help apply for coverage.
- Medigap plans do not include Prescription Drug coverage which must be purchased separately.
- You have certain rights under Medicare rules to join or rejoin Medigap plans as a guaranteed issue. Those rights are listed in Section 3 of “Choosing a Medigap Policy”.
- Historically the most common plans chosen are 'Plan N' and 'Plan F' and increasingly 'Plan G'. Plan F fills all the gaps in Medicare and is the most expensive plan. Plan N has excellent coverage similar to Plan F with minor cost sharing and premiums that are about 2/3 of what Plan F costs. Plan G is identical to Plan F except that it does not cover the annual Part B deductible and is often available at a good enough price to make it attractive to people that want full coverage. Plan F is scheduled to be retired in the near future, although, people that have purchased the plans may keep them.
- Drug coverage must be purchased separately from Medigap plans but is usually incorporated into Medicare Advantage plans.
- Household discounts and a discount for automatic payment may apply. Rates are subject to change generally on an annual basis. Actual rate for some companies will be determined upon acceptance into the program based on eligibility criteria and your medical conditions. See plan documents for full details. Never cancel other insurance before receiving acceptance in writing from the carrier.
- Medicare Supplement coverage is meant to work alongside your Original Medicare coverage; as its name implies, Medigap plans provide supplemental, not stand-alone, benefits. You'll need to remain enrolled in Original Medicare, Part A and Part B, for your hospital and medical coverage.
Medicare.gov-Medicare Supplements is the official U.S. Government site for Medicare, where you can enroll in or change plans, learn about what Medicare covers and learn about Medicare supplement (Medigap) plans, Medicare advantage plans, prescription drug coverage plans and other important-to-know information. Social Security turns this benefit on and off and issues ID cards for both Medicare and Social Security.
This booklet contains information on choosing a Medigap policy to supplement the original Medicare plan. (56 pages).
Choosing A Medigap Policy: A Guide To Health Insurance For People With Medicare - 02110.
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Call (360) 834-0200 or (800) 547-1567 for help with these rates.
This website and its contents are for informational purposes only. Nothing on the website should ever be used as a substitute for professional medical advice. You should always consult with your medical provider regarding diagnosis or treatment for a health condition, including decisions about the correct medication for your condition, as well as prior to undertaking any specific exercise or dietary routine.