Some insurance companies sell Medicare Supplement Insurance policies to Medicare beneficiaries to cover some of Original Medicare’s out-of-pocket costs. These out-of-pocket costs can include Part A and Part B deductibles, coinsurance and copayments.
Keep reading to learn more about Medigap, including when and how to purchase a policy.
What You Should Know About Medigap
Before you buy a Medigap plan, first understand the following about the health insurance companies that sell them.
- There are a lot of Medicare Supplement Insurance companies.
One helpful way to shop for Medigap is with the assistance of a licensed agent. Each type of Medigap plan will offer the same basic benefits wherever it is sold, so the key to shopping for a policy is finding the most competitive rate for the plan you want.
A licensed agent can help you find the right plan available for your needs. You can speak to a licensed agent now at 1-888-264-0148.
- Companies that sell Medigap plans must offer standardized basic benefits.
There are 10 standardized Medicare Supplement Insurance plan types available in most states, identified with the labels A, B, C, D, F, G, K, L, M and N.
By law, each plan must provide the exact same basic benefits as every other type of plan of the same letter, regardless of where it is sold (exceptions are Massachusetts, Minnesota and Wisconsin, where different options are offered).
Medigap Plan B sold by one insurance company on the east coast must contain the same exact basic benefits as Medigap Plan B sold by a different company on the west coast.
- Medigap plan costs and additional benefits are not standardized.
While the basic benefits of each Medicare Supplement Insurance plan are standardized, the prices of those plans are not. Medigap insurance companies have the freedom to set their own prices for plans, so not everyone will be paying the same amount for the same coverage.
In fact, research shows that the cost of the same type of Medigap plan can vary by up to 68% from one insurance company to another.1
- Some Medicare Supplement Insurance companies may offer different pricing models.
While much of the disparity between Medigap prices is related to the variations in regional markets, some of it also has to deal with the different ways that plans may be priced by the insurance companies that sell them.
- Some companies also offer discounts.
In addition to different pricing models, some companies may also offer certain discounts and incentives that can influence the price.
Discounts may be granted to women (who have a longer life expectancy and can therefore make a higher number of premiums) and non-smokers (who are less likely to need health care). Discounts may also be offered to married couples who each buy a plan, patients who use an electronic funds transfer to make payments or for patients who pay on a yearly basis as opposed to monthly. Any possible discounts will vary based on insurance company.
- Companies may be able to use medical underwriting to set your price.
If you sign up during your Medigap open enrollment period, insurance companies are not allowed to base the cost of your plan on your health status (a process known as “underwriting.”) Your six-month open enrollment period begins when you are at least age 65 and are enrolled in Medicare Part B.
If you wait until after your open enrollment period, companies have the freedom to use underwriting and the cost of your plan can be dictated by any current health issues or even your family’s medical history.
- Insurance companies do not have to sell all 10 standardized Medicare Supplement Insurance plans.
Some states may have laws that prevent companies from selling a particular plan. Some state laws require certain plans to be sold. There is one stipulation that all insurance companies in all states must abide by however:
If they sell any Medigap policies at all, they must offer Plan A and either Plan C or Plan F.
- Once an insurance company sells you a Medicare Supplement Insurance plan, it can’t be cancelled if you are paying your premiums on time.
As long as you continue to pay your premiums on time, a Medicare Supplement Insurance plan is guaranteed renewable, even if your health deteriorates. You may keep your plan even if it is dropped from the Medigap lineup on a “grandfathered” basis. There are patients still utilizing their Plan J coverage today, despite the fact that Plan J is no longer sold after 2010.
Now that you know how Medigap insurance is sold, it’s time to start shopping.
Speak with a licensed agent at 1-888-264-0148 to compare quotes from Medicare Supplement Insurance companies in your area.