What is Medicare Supplement or "MEDIGAP" Insurance?
Medicare Supplement or "Medigap" insurance is made to supplement or "fill the gaps" in the benefits of original medicare (Parts A and B). A beneficiary must be enrolled in both Parts of Medicare to apply. Medigap policies must follow federal and state laws, and they must be identified as “Medicare Supplement Insurance.” Insurance companies can sell you only a standardized policy identified in most states by letters A through D, F through G, and K through N. All policies offer the same basic benefits.
Simply put, Medicare Supplements are standardized to be the same between companies. This means that a plan G is a plan G, no matter where you purchase it. It is almost akin to buying a brand-name product at a grocery store; it does not matter which grocery store you go to, you still will be purchasing the same brand name product. The only difference is that you will pay a different price dependent on where it was purchased!
Why Should I choose a Medicare Supplement Plan?
Medicare Supplements can be of a benefit to clients who are looking to pay a reasonable monthly premium for comprehensive coverage. Cost beneficial and comprehensive Medicare Supplement plans usually require the beneficiaries to pay a monthly premium and a small deductible ($203 once a year for part B), which results in full freedom within the Medicare network, no copays, and no coinsurance. This gives most clients piece of mind; knowing that you are covered for virtually anything, anywhere in the United States, and the payments are controlled.
What are the most popular Medicare Supplements?
The most popular Medicare Supplement plans among current beneficiaries are the plans F, G, and N. Prior to 2020 Plan F was the most comprehensive policy available, requiring only the payment of a monthly premium before receiving comprehensive benefits. Unfortunately Plan F is no longer be available to new Medicare beneficiaries who have started their coverage after 2020. Those that already have the plan may remain.
With plan F no longer available, Plan G is now the most comprehensive option. The Plan G requires meeting the Part B deductible ($203 for 2021), and then any covered service that Medicare does not pay in full is paid by the plan G. Simply put, once the part B deductible is met the plan becomes fully comprehensive. Although plan G does require the responsibility of the $203 deductible once each year, the annual savings in comparison to the plan F far surpass the deductible cost. For clients that are looking for the most comprehensive, but most cost beneficial plan, Plan G is the answer.
Plan N is similar to plan G, but requires up to a $20 copay at the physician and up to a 50$ copay at the ER, and does not cover part B excess charges. For those that do not use provider services often, this can be of a great savings - some plan N premiums fall up to 30$ a month less than the plan G. If you are not using the doctor every month, this can create a savings. For those frequent fliers, or those using specialists that may charge excess, this may not be the right choice.
What if I have Medicare due to Disability?
Plan D is the only supplement offered to those on Medicare under 65 due to disability. It does offer comprehensive benefits, minus coverage of the part B excess and Part B deductible. The premium is comparable to the plan G, but can increase at different rates. For those beneficiaries who started Medicare prior to 2020, the plan C disability supplement is also available. For a comparatively higher premium, the plan C covers each gap within original Medicare except the Part B Excess. Those over 65 can still purchase these plans, but it may not be cost beneficial.
How much does the price of Medicare Supplements increase?
With most Medicare supplement plans the rate will go up each year, but Medicare Supplement plans increase their rates at different amounts based on a multitude of factors. Remember, all Medicare supplement plan benefits are identical between companies; so the biggest difference is the price of the plan and the rate at which it increases. Due to marketing costs, operational costs, and brand recognition, some companies may charge more for the same product, and charge more for it over time. Based on how each company labels themselves, Community Rated or Attained Age, they may be able to increase your rate based on the health of the community around you rather than just your age. Because of popularity, the number beneficiaries joining a company's plan potentially allows the rates to stay lower longer. Those companies that do not have enough enrollment may have to raise the rate to upkeep claim payments or stop offering the plan in that state. Because rate increases can be complex, please contact us for more detailed information.