Medicare Supplement or “Medigap” insurances pay the difference between what Medicare pays and Medicare approved charges for covered services. Generally, with some exceptions, Medicare authorizes ten, standard, benefit packages; labeled Plans A through N. This is true in all states. Massachusetts, Wisconsin, and Minnesota offer slightly modified benefits.
Although the plans are labeled A to N, some letter plans are missing. Don’t go looking for plans E, H, I, or J, because they are no longer offered. These previously authorized plans may remain in force for established Medigap plan members, but are closed to new enrollees. Some of the discontinued plans included prescription drug coverage. New enrollees may optionally buy drug coverage through the separate Medicare Part D program.
Medicare publishes a chart which an attempts explanation of the standardized benefit packages. There is a link to that chart below in blue. Many people find the chart difficult to understand. I know I did.
As a new Medicare subscriber, you are entitled to enroll in “Medigap” supplemental insurance plans effective when you join Medicare. The supplemental plans are administered by the various states. During a seven month window beginning three months prior to your birth month and three months following, you may choose any plan without answering any health questions.
Premiums are set by the companies in the individual states. Rates for the same coverage are not necessarily the same between companies or even in all of any one state. All insurers do not operate in all states. All insurers do not offer all plans in all states. Rates may be dependent on your age and change over time.
Should you enroll after your initial enrollment period, you may be asked about your health. You can be turned down or your health risks can be rated. Rating will affect the coverage available to you and the price you pay for that coverage.
The bottom line is: You should buy the most all-encompassing Medigap policy you can afford as you enter the program. There is an annual open enrollment period during the fourth quarter of each year, but you may not be able to upgrade benefits from what you originally bought. Confused yet?
The most complete Medigap coverage is Plan F.
• It covers Part A & Part B deductibles and co-insurance (your 20%) plus 365 days extra co-insurance after Medicare is exhausted.
• The first three pints of blood should you need it.
• Skilled Care and Hospice co-insurance.
• Some foreign travel coverage
Plan F owners pay nothing additional to their Medicare and Medigap premiums with the exception of the plan limits on foreign travel. A special high deductible version of plan F may be available for a lower premium. Drugs, dental, vision, and long term care is handled separately.
Plan G is similar to Plan F with the following exception. The beneficiary will pay for the first $147 in Doctor and Provider bills.
The eight additional, standard, Medigap policies are described in the chart at http://www.medicare.gov/supplement-other-insurance/compare-medigap/compare-medigap.html.
One policy is necessarily any better than any other, just with slightly different benefits and commensurately lower charges depending on the individual insurance company’s risk analysis. Plan A is not always better than Plan B. The names don’t indicate the worth of the policy. The tricky part is to match your own personal tolerance for risk with the benefits offered and your personal budget.
Next, we’ll tackle Medicare Advantage or Medicare Part C programs and explain how they work. Unfortunately, Medicare Advantage is even less standardized than the Medigap programs. Stay tuned.