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What Is a Medicare Supplement Plan?
In order to understand how Medicare Supplement insurance works, you must first understand what Medicare is. Medicare is the Federal government insurance program that helps pay for a variety of healthcare related expenses. Medicare is administered by the Centers for Medicare & Medicaid Services (CMS), which is a division of the U.S. Department of Health & Human Services (HHS).
Medicare beneficiaries are typically senior citizens aged 65 and older or those eligible prior to age 65 due to a disability.
Medicare Supplement Insurance & Medicare
Medicare pays 80% of Medicare covered medical expenses after an annual deductible of $183.00 in 2018. Medicare Supplemental insurance, also referred to as Medigap insurance, or Supplemental Plans, are designed to fill in the remaining 20% of what the Federal Medicare program doesn’t cover. Medigap pays for things such as co-pays and deductibles for covered hospitalization, medical services, and doctor visits and Medicare approved testing.
Before being eligible to enroll in a Medicare Supplement plan, you must first be enrolled in Medicare Part A and Medicare Part B.
The Benefits of owning a Medicare Supplement Plan
Predetermined budgetable expenses
Ability to choose the doctor or hospital of your choice
Ability to see any specialist or visit any specialized facility that accepts Medicare without needing a referral
Coverage is consistent and won't change from year to year
Medigap plans are guaranteed renewable for life as long as premium payments are made
Benefits available when traveling abroad (some plans)
Medicare Supplement Plans are Standardized
Medicare Supplement insurance is “standardized”. There are ten plan options approved by federal and state governmental agencies (Plus a high deductible version of Plan F). These plans are labeled A through N. Regardless of the insurance company, all similarly lettered plans must offer the same coverage. The only real difference between the insurance companies standardized plans is the premium amount which they choose to charge. Example: Medigap Plan G with Mutual of Omaha has the same benefits as Medigap Plan G with AARP or any other company for that matter.
*Plans K-N provide for different cost sharing amounts.
*Plans K and L pay 100% of hospitalization and preventive care Basic Benefits. All other Basic Benefits are paid at 50% for Plan K, and 75% for Plan L. Once you reach the annual limit, the plan pays 100% of the Medicare co-payments, coinsurance, and deductibles for the rest of the calendar year. The annual out-of-pocket limit does NOT include costs from your provider that exceed Medicare-approved amounts (excess charges).
1. Medicare Part A Coinsurance (Hospital)
This benefit covers the coinsurance amounts associated with the cost of hospitalization (semi-private room, general nursing, miscellaneous services, and supplies). After paying your Part A Deductible of $1,340 in 2018, Medicare pays for the first 60 days of hospitalization. For days 61-90 Medicare pays all except for $335; days 91 and beyond, Medicare pays all except $670 a day, up to the 60 lifetime reserve days. All standardized Medicare Supplements cover Medicare Part A Coinsurance, and this means they will pay the coinsurance amounts for days 61 through your lifetime reserve, $335 and $670 a day respectfully for 2018.
2. Medicare Part B Coinsurance (Medical)
This benefit covers care given in or out of the hospital, including outpatient treatment (doctor services, supplies, speech and physical therapy, diagnostic tests, durable medical equipment). After paying your Part B Deductible of $183 in 2018, Medicare pays 80% of the cost. All of the standardized Medicare Supplements cover the remaining 20% not paid by Medicare. Plan N Medigap requires a $20 co-payment for doctor’s office visits before paying the remaining 20% as well as a $50 Emergency Room co-payment which is waived if admitted to the hospital.
3. Blood (First 3 Pints)
This benefit applies to both Medicare Part A and Medicare Part B. Under most circumstances blood is supplied free of charge via a blood bank. However, when there is a charge, Medicare only covers the cost in full after the first 3 pints of blood. All standardized Medicare Supplement plans cover the expense of the first 3 pints of blood when there is a charge. All Medicare Supplements cover this benefit area.
4. Part A Hospice Care Coinsurance and Co-payment
If you require hospice care, Medicare covers all costs except a $5 co-payment for prescription drugs and a 5% coinsurance for respite care. All standardized Medicare Supplements cover the coinsurance and co-payments associated with hospice care. All Medicare Supplements cover this benefit area.
5. Skilled Nursing Facility Care Coinsurance
For the first 20 days of care, Medicare covers all expenses following a 3 day hospital stay. Days 21-100 Medicare pays all except $167.50. At Day 101 and beyond, Medicare pays nothing. The Medigap plans that offer this benefit will pay all coinsurance amounts up to the 101st-day except Medigap Plan K (50%) and Medigap Plan L (75%).
Covered:
Medigap Plan C, Medigap Plan D, Medigap Plan F, Medigap Plan G, Medigap Plan K*, Medigap Plan L*, Medigap Plan M & Medigap Plan N
Not Covered:
Medigap Plan A & Medigap Plan B
6. Part A Deductible
Before Medicare pays any benefits under Part A, there is a deductible of $1,340 per benefit period. The plans that offer this benefit will pay the deductible in full except Medigap Plan K (50%), Medigap Plan L (75%), and Medigap Plan M (50%).
Covered:
Medigap Plan B, Medigap Plan C, Medigap Plan D, Medigap Plan F, Medigap Plan G, Medigap Plan K*, Medigap Plan L*, Medigap Plan M* & Plan N
Not Covered:
Medigap Plan A
7. Part B Deductible
Before Medicare pays for any Part B benefits, there is an annual Medicare Part B Deductible of $183. Both Plans that offer this benefit pay 100% of that amount. Due to new legislation taking effect in 2020, this benefit will no longer be provided by any Medigap Plan.
Covered:
Medigap Plan C & Medigap Plan F
Not Covered:
Medigap Plan A, Medigap Plan B, Medigap Plan D, Medigap Plan G, Medigap Plan K, Medigap Plan L, Medigap Plan M & Medigap Plan N
8. Part B Excess Charges
These charges refer to costs under Medicare Part B that are above the Medicare approved/allowable amounts.
Covered:
Medigap Plan F & Medigap Plan G
Not Covered:
Medigap Plan A, Medigap Plan B, Medigap Plan C, Medigap Plan D, Medigap Plan K, Medigap Plan L, Medigap Plan M & Medigap Plan N
9. Foreign Travel Emergency Care
This covers emergency health care coverage when traveling outside the United States. Of the 10 standardized plans, 6 of them offer coverage for Foreign Travel for medical emergencies while traveling, as long as medical care starts within 60 days of leaving the United States. When a Medigap plan covers foreign travel, the patient pays a $250 deductible plus 20 percent coinsurance, and there's a lifetime benefit maximum of $50,000
Offers Coverage:
Medigap Plan C, Medigap Plan D, Medigap Plan F, Medigap Plan G, Medigap Plan M & Medigap Plan N
Not Covered:
Medigap Plan A, Medigap Plan B, Medigap Plan K & Medigap Plan L
Buying a Medigap Plan
Prior to enrolling, you must first determine your eligibility. If you are just turning 65, and in your Initial Enrollment Period (IEP), your Medicare supplement policy is guaranteed issue. This means the company cannot ask you any health questions when you complete your for Medigap coverage. Your IEP starts three months before the first day of the month in which you turn 65, and ends three months after the first day of the month in which you turned 65. You should consult with your Secure Care65 licensed agent regarding eligibility.
Compare the different Medicare Supplemental insurance plans, A through N, and decide on which Medicare Supplement plan best suits your individual needs. When choosing a Medigap plan, always consider both your current and future needs since this may be your only opportunity to choose should your health change.
Medicare Supplement Rates can vary substantially between the different plans and different insurance companies, and you must remember that just because one is more expensive, it isn’t necessarily better . You should shop and compare as many companies and plans as possible with your SecureCare65 licensed agent. Rates from one company to another can vary substantially.
Medicare Supplemental policies are not a one size fits all product. Choosing the right plan and company can be complicated and confusing if done all alone. Before making a final decision, SecureCare65 highly recommends speaking with one of our licensed expert agents. Your SecureCare65 licensed agent can help determine your eligibility and needs. At NO COST, you will be provided a detailed Medigap quote utilizing our proprietary database of all the Medicare Supplement policies available in your specific geographical area.
