A Medicare Supplement (Medigap) plan is an insurance policy sold by private insurance companies to fill the “gaps” in Original Medicare plan coverage. The gaps that Medicare Supplement plans can fill, entail copayments, coinsurances, and deductibles. Medicare is the first payor of your eligible medical expenses, and your secondary payor is the Medicare Supplement plan. Medicare Supplements differ from Medicare Advantage plans (like an HMO or PPO) because those plans are ways to get Medicare benefits, while Medicare Supplements augment the costs of your Original Medicare benefits. You also can’t have both a Medicare Advantage plan and Medicare Supplement plan at the same time. It is important to note that all Medicare Supplements plans must follow federal and state laws designed to protect you and policies must be clearly identified as “Medicare Supplement Insurance.” Each standardized Medicare Supplement plan must offer the same benefits, no matter what insurance company sells it. So Medicare Supplement plans in Texas, will comprise of the same benefits of another Medicare Supplement plan sold elsewhere in the country.
How Do Medicare Supplements Work Specifically?
As you might recall from reading our Medicare 101 page, Original Medicare will only cover 80% of your Part B medical expenses, leaving the 20% on your hands. That 20% can be financially devastating to you and your family if a serious illness arose. Medicare Supplements augment the 20%, the amount dependent on the plan you choose.
So how do Medicare Supplements work in practice? Well first, it entails getting medical treatment, perhaps taking care of a minor surgery that needs attention from an outpatient facility such as an ambulatory surgery center (ASC) in Texas for example . What will happen when you get to the counter of the facility you are seeking care from is they will ask for your insurance coverage, in which case you show both your Original Medicare card and your Medicare Supplement plan, such as one from Mutual of Omaha or Humana for example. Once you have received medical services, the provider will first bill the primary payer (Medicare). What happens behind the scenes, is that Medicare will look over the charges from your treatments, pay the approved portion of the medical bills and any excess charges are sent to your secondary payer (Medicare Supplement plan). Lastly, your Medicare Supplement plan will pay the excess amount left over from Medicare, which is dependent on the terms of your plan.
What Do I Need To Join A Medicare Supplement?
You’re eligible for a Medicare Supplement plan if you are enrolled in both Original Medicare Parts A and B. To learn how to acquire Medicare Parts A &B, visit our Medicare 101 page. Beyond this, eligibility is dependent on when you sign up for a Medicare Supplement plan, which we will discuss below.
When Can I Enroll In A Medicare Supplement?
You can enroll in a Medicare Supplement plan during the enrollment periods below:
Open Enrollment Period- This is a one-time only, 6-month period when federal law allows you to buy any Medicare Supplement you want, that is sold in your state. It starts in the first month that you’re covered under Medicare Part B and you’re 65 or older. During this period, you can’t be denied a Medicare Supplement or charged more due to past or present health problems. We call this the “get out of jail free card” because you have a lot of power in what route you take with your Medicare plan and if someone had cancer for instance and they wanted a Medicare Supplement, they can get one and not be charged more premium for that condition. It is important to buy a Medicare Supplement plan during your Open-Enrollment Period because otherwise, insurance companies that provide the Medicare Supplement plans are generally allowed to use medical underwriting to decide whether to accept your application and how much to charge for the policy.
Guaranteed Issue Right- If you apply for a Medicare Supplement after your initial eligibility, it becomes more challenging to acquire one. Don’t despair however, you may still qualify for a Medicare Supplement without having to go through underwriting or paying more for health conditions you have. Most cases entail you having other health coverage and that changes in some fashion. It could be you have a Medicare Advantage plan, and you move out of the service area and decide to get a Medicare Supplement now instead of another Medicare Advantage plan. Or maybe you enrolled in a Medicare Advantage plan when you first got Original Medicare (thanks pushy sales agent), have second thoughts, so you drop it and enroll in a Medicare Supplement within 12 months (called trial right). One common qualifier we see for folks who want Medicare Supplement plans here in Texas and beyond, is they have had creditable health coverage through an employer and when they retire or lose that coverage, they have a period of time (63 days) to enroll in a Medicare Supplement with a guaranteed issue from the insurance company. To see other instances of a guaranteed issue right, go here.
Underwritten- If you have the misfortune of not meeting any of the enrollment qualifiers we discussed and you still want a Medicare Supplement plan, you can do so dependent on your medical history. If you have a relatively health background, it should be no problem getting onboard with a Medicare Supplement, but if you have had recent hospitalizations, surgeries, or diagnosed with a chronic disease, it can make things more challenging. We work hard here at The Harrin Group in San Antonio, Texas to work on your behalf and find an insurance carrier that you have the best shot of being accepted with, as underwriting differs depending on the insurance company. Some are more lenient than others on risk tolerance. Keep in mind, that if accepted, an insurance company may have a waiting period on a pre-existing condition up to 6 months, but once that period has ended, they have to cover care related to that condition.
What Are The Different Types Of Medicare Supplement Plans?
Currently, there are 10 standardized Medicare Supplement (Medigap) plans, each represented by a letter (A, B, C, D, F, G, K, L, M, N). There is also a high deductible-version of Plan F and Plan G in some states. These plans are available in most states; Massachusetts, Minnesota, and Wisconsin each have their own different set of standardized Medicare Supplement plans. Coverage levels and premiums vary, but the benefits of each plan within a lettered category remain the same despite the insurance company or location. For example, Medicare Supplement Plan G benefits are the same in Florida or California as they are in Texas. If a Medicare Supplement plan includes a certain benefit, this benefit is covered 100% unless otherwise specified. Some of the more popular plans consumers seek out in our experience have been Plan F’s (if qualified to get one) and Plan G.
Something very important to keep in mind when shopping for a Medicare Supplement plan is that if you turned 65 after January 1, 2020, you will not be eligible to buy a Plan F or Plan C. If you already have either of these 2 plans (or the high deductible version of Plan F) or are covered by one of these plans before January 1, 2020, you’ll be able to keep your plan. If you were eligible for Medicare before January 1, 2020, but not yet enrolled, you may be able to buy one of these plans. One such example of how someone can still get a Medicare Supplement Plan F or Plan C stems from a case we had recently here in Texas, which entailed a client losing his Medicare Advantage plan and because he was over 65 and had Medicare already, he was able to purchase a Plan F.
What Do Medicare Supplement Plans Cover?
In a nutshell, all Medicare Supplement plans cover the following benefits:
Medicare Part A co-insurance and hospital costs (up to an additional 365 days after Medicare benefits are used)
Medicare Part B co-insurance or co-payment
Blood (first 3 pints)
Part A hospice care co-insurance or co-payment
Some Medicare Supplement plans may also cover :
Skilled nursing facility care co-insurance
Medicare Part A deductible
Medicare Part B deductible
Medicare Part B excess charges (the amount that a non-participating provider may charge above the Medicare-approved cost for a service)
Foreign travel emergency (up to plan limits)
Do Medicare Supplements Cover Extra Benefits Like Gym Memberships?
It depends. Some Medicare Supplements provide these services as an actual benefit, others may give you a discount. Speaking of discounts and from our experience, many Medicare Supplements plans in Texas and beyond do include discounts on dental, vision, and the like. We here at The Harrin Group take all of these factors into consideration when we analyze your individual situation.
What Don’t Medicare Supplement Plans Cover?
Medicare Supplements plans do not cover long-term care (like non-skilled care you get in a nursing home), vision or dental care, hearing aids, eyeglasses, or private-duty nursing.
A very important point is that although some Medicare Supplement plans in the past covered prescription drugs, those sold after January 1, 2006 aren’t allowed to include prescription drug coverage. If you want prescription drug coverage, you can join a Medicare prescription drug plan (Part D) offered by private companies approved by Medicare, such as Silverscript. It is crucial to ensure that your start dates for both a Medicare Supplement and Part D plan are aligned accordingly if you want Part D coverage, which can easily be done in your Open-Enrollment Period or if you have a Guaranteed Issue Right in most cases. Otherwise, you may have a delay in your Part D coverage start date and possible penalties for late-enrollment. For more comprehensive information on Part D plans, visit our specific page here.
What Do Medicare Supplement Plans Cost?
Let’s start with the basics first. As you learned from our Medicare 101 page and from above, you must have both Medicare Part A&B to be on a Medicare Supplement plan. For many Americans, Part A is premium free because they worked at least 10 years (40 quarters) and payed Medicare taxes during that time and Part B is dependent on your adjusted gross income from 2 years prior, but typically is $144.60 a month in 2020. Many Americans deduct their Part B premiums from Social Security automatically but we do meet folks who delay their Social Security benefit, in which case they will pay their Part B premiums quarterly.
How Do Insurance Companies Set Prices For Medicare Supplement Plans?
Each insurance company will decide how they set the price (premium) for its Medicare Supplement plans. The way they set the price affects how much you pay now and in the future. Medigap policies can be priced or “rated” in 3 ways:
Community rated (also called “no-age-rated”)
Issue-age-rated (also called “entry-age-rated”)
With community rated in general, the same premium is charged to everyone who has the Medigap policy, regardless of age or gender. Issue-age-rated means the premium is based on the age you are when you buy (are issued) the Medicare Supplement plan. The last one is attained-age-rated, which means the premium is based on your current age (the age you attained), so your premium goes up as you get older.
When shopping for Medicare Supplement plans in Texas or elsewhere, keep in mind that all plans are the same, regardless of carrier. So if you are looking at premiums (your monthly payment) and you see a Mutual of Omaha Plan G is $112 a month, but wondering why the Blue Cross Blue Shield Plan G is $148 a month, just remember plans differ depending on what insurance company you want your coverage with. What we do at The Harrin Group here in San Antonio, Texas, is work with top-rated insurance companies and try to mitigate rate hikes, by using lesser known and maybe “cheaper” insurance companies. One thing we also take into consideration is other discounts that could apply, dependent on the carrier, such as household discounts. These can sometimes be quite a significant savings, such as 14% in some cases! As Medicare Supplement plans only cover one person, you will have to have separate policies if you have a spouse.
As you learned above, some plans have you pay a deductible, copayment, or coinsurance. For instance, if I decide to get the Medicare Supplement Plan G, I would incur the Part B deductible of $198 for the year. Once I meet that, I would have no other medical bills!
What Are More Highlights Of Medicare Supplement Plans?
30 Days Free Look-Return any policy for any reason within 30 days after receipt for a full refund of all premiums paid.
12-Month Rate Guarantee-No rate increase usually for the first 12 months, as long as the premiums are paid on time.
Guaranteed Renewable-No worries of reduced benefits or cancelled coverage for the life of the policy, as long as the premiums are paid on time.
Freedom To Choose Your Doctors- You control and choose the physicians who you trust for your care.
Go Direct To Your Doctors- You can go directly to the physicians and specialists you choose without pre-certifications and pre-approvals.
Benefits Stay The Same- You always know what your benefits are with this standardized plan, meaning no surprises or re-evaluations year after year.
Portable Coverage- You are not restricted to use a network of health care providers. If you move, your coverage goes with you.
Do Agents/Brokers Get Paid To Enroll Me On A Medicare Supplement Plan?
Yes. We are real straight-forward folks here at The Harrin Group and want to give you a behind-the-scenes look at compensation. Basically, an agent or broker gets compensated from the insurance company he/she is representing, for every new Medicare Supplement plan enrollment. While we won’t go into exact numbers, an agent or broker gets compensated much less for enrolling you in a Medicare Supplement plan than a Medicare Advantage plan. Enrollment in a Medicare Advantage plan is much easier for the agent or broker, and since they get paid more, it may be in their personal interest to present that as your best option, when in reality, it may not be. You want to be really, really careful about who you work with, and ensure they are independent insurance agents/brokers who represent multiple insurance companies, don’t charge any fees to assist you, are highly rated, ethical and reliable folks that present all options based on your needs. The latter point is where many people come to us here in San Antonio, Texas, asking for us to be their new broker, as their last one never answered the phone after the sale was done, or never replied to their numerous emails. We strive to assist each and every client with the same urgency before and after the sale, and pride ourselves on living by the Golden Rule in business “treat others the way you want to be treated.”
I Want To Read More About Medicare Supplement Plans, Where Should I Go?
We would start with the latest 2020 “Choosing a Medigap Policy” handbook, published yearly by The Centers for Medicare and Medicaid Services (CMS). You can access the ebook-version here.
How Do I Enroll?
If you would like to enroll into a Medicare Supplement, we kindly ask youcontact us so we can do a free, custom analysis on your situation, and find a plan suitable for your individual needs.
More a visual learner? Check out the recap below⇓
The Harrin Group offers free, comparative quotes on Medicare Supplements from multiple insurance carriers so you can get the best possible rate.