Medicare supplement plan

A 2020 study shows that the average person pays around $3,731 per year in out-of-pocket costs for medical care, despite the savings offered by traditional Medicare. That’s why a Medicare supplement plan that takes care of these extra expenses is a good option for most aging citizens.

Supplement plans aren’t cheap, though, so if you want to avoid paying for things you don’t need, it’s important to consider a few things before signing up.

Find out more about how to choose the best plan for your needs here. 

What Is a Medicare Supplement Plan?

Medicare supplement plans also go by the name Medigap plans. That’s because they cover the ”gaps” left by Original Medicare health insurance i.e. co-payments, coinsurance, and excess charges.

That means, once you’ve paid your monthly premium, you needn’t worry about any extra bills concerning your healthcare costs, as long as your supplement plan covers these treatments.

Comparing Supplement Plan Costs

There are eight different kinds of supplement plans. These are plans A, B, D, G, K, L, M, and N. The Federal Government discontinued plans C and F at the onset of the 2020 Medicare plan enrollment period.

That means, if you signed up for these Medicare plan options before 2020, you’re still covered. If you didn’t, it’s too late.

Private insurers offer Medicare supplement plans based on federal guidelines. Some plans differ only regarding the deductible. Others cover more costs, and others require higher cost-sharing.

Most of these Medicare plan options have one of the following pricing structures:

  • Issue-age rated premiums comprise a fixed cost based on your age when you enroll
  • Community-rated plans have one fixed premium for all members, regardless of age
  • Attained-age rated premiums start at a fee based on your age and increase incrementally

So, your future earning potential is one of the factors to consider when choosing a plan. 

What’s Offered By Different Types of Supplements?

It makes sense to compare the costs of each plan based on what they offer, versus your needs.

Important factors to consider when comparing plans include the deductible as well as the percentage they cover regarding lab tests, doctor visits, and other outpatient services. Remember to factor in the cost of coinsurance for hospital stays after treatment.

If you travel regularly, you should look carefully at the coverage offered for out-of-network treatment.

These are the basic inclusions in each plan for 2021:

Medigap Plans A and B

Medigap plan A is usually the cheapest option and offers the fewest benefits to members. It covers the following:

  • Medicare Part B co-payments and coinsurance 
  • Part A Hospice care coinsurance or co-payments
  • Up to three pints of blood transfusions

Medigap Plan B offers all the above plus cover for your Part A deductible.

Medigap Plans D and G

Medigap Plan D is almost the same as Plan B, except it also covers up to 80% of costs for approved medical expenses outside the US. This refers to emergency treatment only, and an annual limit applies.

Medigap Plan G is similar to Plan D, but it also covers Medicare Part B Excess charges.

Some states offer high-deductible versions of plan G.

Medigap Plans K and L

These plans only cover a portion of some costs included in Plans A to G.  Plan L covers 75% and Plan K pays 50% of the following:

  • Medicare Part B coinsurance or co-payment 
  • Medicare Part A Deductible
  • Blood transfusions up to three pints        
  • Part A Hospice Care coinsurance or co-payment 
  • Coinsurance for care at a skilled nursing facility

These plans have out-of-pocket limits, so they only cover your expenses once you reach this threshold.

Medigap Plans N and M

Both these plans are partial versions of Medigap Plan D, except Plan M only covers half of the Medicare Part A Deductible and Plan N pays 100% of your Part B coinsurance. 

With Medicare Plan N, you pay up to $50 for emergency room visits that don’t require inpatient admission, plus a $20 co-payment for some doctor’s office visits.  

When Should You Sign Up for Supplement Plans?

The best time to sign up for a Medicare supplement plan is during your Medigap Open Enrollment Period. This time frame starts on the first day of the month that you enroll in Medicare Part B and continues for six months.

During this period, you enjoy guaranteed enrollment to any supplement plan offered in your service area. Insurers can’t deny your application, or charge you more, on the grounds of pre-existing conditions or your medical history. 

These pre-existing conditions refer to any health issues that existed before the start of your policy, and they vary depending on the cover you choose.  

If you do have any disabilities or existing medical conditions, it’s vital to take advantage of this window. There are a few other occasions you can enjoy guaranteed access.

These are when:

  • Your Medigap insurance company misleads you or goes bankrupt
  • Your employer gap cover ends
  • You move out of your existing Medigap or Advantage plan’s service area
  • Your existing Medigap coverage ends due to things beyond your control
  • You want to switch from Medicare Advantage to Original Medicare within a year of enrollment
  • You want to change back to Original Medicare within a year of canceling it in favor of a Medicare Advantage plan

Outside these times, you could struggle to find a suitable or affordable supplement plan without medical underwriting.

Are You Ready to Cut Down Your Medical Costs?

Negotiating the Medicare enrollment process can get complicated. It’s best to work with an experienced Medicare specialist to ensure you get the best supplement plan for your present and future needs.

Don’t leave it too late. It’s vital to understand the process well before your 65th birthday to avoid costly and unnecessary delays in your cover. 

Get in touch for assistance with reviewing your Original Medicare and Medicare supplement plan options, so you can enjoy the peace of mind you deserve during your retirement.