If you’re nearing age 65, you’re probably considering your Medicare enrollment options. The standard coverage beneficiaries receive is Medicare Parts A and B, known as Original Medicare. Part A includes coverage for hospitals, skilled nursing facilities, and hospice care while Part B includes doctor visits, outpatient therapy, ambulances, and medical equipment. Both parts have deductibles and copayments/coinsurance. So depending on your healthcare needs, it might be worth looking into Medicare Supplement insurance (also called Medigap) to help pay these out-of-pocket expenses.
Here are five things to consider when deciding if a Medicare Supplement is right for you.
1. Do You Want Access to a Variety of Options to Fit Your Needs?
There are 11 different Medicare Supplement plans to meet your individual needs. Plans are represented by letters (A, B, C, D, F, G, K, L, M, and N, including a high-deductible version of Plan F) and cover a percentage of your Medicare out-of-pocket costs. You can choose a plan that covers from 50 percent to up to 100 percent of certain expenses. The monthly premium for each plan depends on how much coverage you want. So you can decide what’s the best fit for your budget.
2. Do You Want Freedom to Choose Your Providers?
Because Medicare Supplement plans don’t have networks, you have the freedom and flexibility to choose any doctor or hospital across the nation that accepts Medicare. This can be very helpful if you live in another state for certain months in the year or take trips out of state to visit loved ones. Plans are also standardized across the majority of states, which means you get the same benefits no matter where you buy a policy. The only exceptions are Minnesota, Wisconsin, and Massachusetts, which have different rules.
3. Do You Receive Medical Treatment Often?
If you visit a specialist or primary care doctor on a regular basis (i.e., monthly or weekly), you usually pay a Part B copay or coinsurance for each appointment. This can become costly over time. Not to mention the daily Part A coinsurance if you need medical treatment in a hospital for more than 60 days. For instance, you pay $335 per day (in 2018) of each benefit period during days 61 to 90 of inpatient hospital stay. When you enroll in Medigap, the plan helps cover these recurring out-of-pocket costs after Medicare pays its portion.
4. Do You Have Any Pre-Existing Health Issues?
During your Medigap Open Enrollment Period (Medigap OEP)—which is a one‑time 6-month period that typically starts the first month you’re enrolled in Part B when you’re 65 or older—you’re entitled to buy an available plan regardless of your medical history. And you cannot be charged a higher premium because of a preexisting condition.
You also get these protections when you have a “guaranteed issue right” to buy Medigap. Guaranteed issue rights usually apply when your Medicare insurance changes or you lose coverage. If you have a guaranteed issue right, you can enroll in Medigap even after your OEP ends—but no later than 63 calendar days after your health care coverage ends—and still get coverage for all your preexisting conditions without paying more. However, you may have a 6-month “pre-existing condition waiting period” in which the Medicare Supplement plan may not cover your out-of-pocket costs for pre-existing conditions.
5. Are You Planning to Travel Internationally?
If traveling abroad is a priority, this is another reason to consider a Medicare Supplement plan. In the event, an unforeseen injury, accident, or sickness occurs while you’re outside the United States, most Medicare Supplement plans will provide coverage for medically necessary emergency care. With Original Medicare Parts A and B, you typically don’t get coverage for health care you receive in a foreign country.
Buying a Medicare Supplement (Medigap) Plan
When shopping around for Medicare Supplement insurance, keep in mind that the plan won’t replace your Original Medicare coverage. These plans are typically used to help pay out-of-pocket expenses that Original Medicare doesn’t cover, such as copayments, coinsurance, and deductibles.
Because Medigap only works with Original Medicare, you must be enrolled in Medicare Parts A and B to buy a policy. Private insurance companies sell Medigap plans. But companies aren’t required to sell every plan. That’s why it’s helpful to work with a licensed insurance agent who can compare Medicare Supplement plans from different insurance companies to find the right one for you. An agent can also help you choose Medicare Part D prescription drug coverage, which is not included in a Medicare Supplement plan.
If you’re close to reaching Medicare eligibility, it’s time to consider your coverage options. Original Medicare offers reliable benefits, but it doesn’t cover everything. If you’re looking for a health plan that offers nationwide coverage and the flexibility to manage your out-of-pocket medical expenses, Medicare Supplement insurance might be the extra peace of mind you’re looking for.
About The Author:
Michael serves as Executive Vice President of HealthMarkets—one of the nation’s largest independent insurance agencies in the Medicare, individual and supplemental health, life, and small group insurance markets. He has a B.S. in Economics from The Wharton School, University of Pennsylvania, and holds the chartered property casualty underwriter (CPCU), associate in insurance accounting and finance (AIAF), an Associate in Reinsurance (ARe). An avid Kansas City Royals fan, he lives in Dallas with his wife and children.