Medicare Supplement policies often contain terminology and stipulations that can be confusing to many people. The following will help you understand some of the basics of Medicare Supplements.
Medicare Supplement Insurance can only be purchased by people who are covered by Original Medicare: Parts A and B. If you currently have a Medicare Advantage plan, you can’t have a supplement at the same time.
Supplements are not regulated by Medicare
While Medicare is a federal program, it’s important to realize that Medicare Supplement policies are provided to consumers by private insurance companies and not the government. However, both the federal and state governments regulate the plans that are offered.
All of the plans available are standardized and will offer the same basic benefits with all companies. Currently, the available plans include A, B, C, D, F, G, K, L, M, and N. So while factors like the cost of a plan may vary, Plan A from one company must cover the exact same things as Plan A from any other company.
Due to new regulations, Plans C and F will not be offered to new Medicare enrollees after January 2020. However, anyone who already has Plans C or F will be able to keep their coverage, and anyone who was eligible for Medicare before January 2020 may still be able to choose Plan C or F.
Medicare Supplements are often referred to as “Medigap.” Medigap is simply another popular term for Medicare Supplement Insurance. Some websites may also use the abbreviation MSI.
Some plans are available in high-deductible, select, and innovative options. The government does not require companies to offer these options.
• High Deductible: High deductible plans offer lower monthly premiums, but a higher annual out-of-pocket spending cap.
• Select Plans: With Medicare plans, patients can usually choose to visit any doctor that accepts Medicare without a referral. But if a patient has a Select supplement plan, they’ll be required to choose from a smaller network of pre-approved facilities and doctors. However, the premiums on Select plans are typically much lower.
Medicare Supplement plans do not cover prescription medication. However, customers who want this coverage can add on Medicare Part D, which is offered by many companies who provide Medicare Supplement plans.
Supplements have three main pricing structures that affect how much your policy costs. The pricing structure that is used will be determined by the company issuing the policy as well as state laws.
- Attained Age: Attained age pricing will be at its cheapest when you first enroll at age 65. However, the premiums for these policies will increase each year, making them more expensive as time goes on.
- Community Rated: Community-rated pricing means that the premiums will be the same for all people living in a given area, plans can have a discount factor for age over a period of time, for example: AARP plan has a 39% discount over the first 12 years.. However, factors like gender and tobacco use can still be factored into the cost.
- Issue Age: These policies’ rates are determined by your age when you first purchase the policy, but they do not automatically increase every year.