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Medicare supplement insurance (also called Medigap) is coverage sold by private insurance companies and helps pay for costs that Original Medicare (Parts A and B) doesn’t cover, like copayments, coinsurance, and deductibles.
Medicare supplement plans are a good choice for most seniors, since Medicare can have substantial costs—in 2015, for example, the deductible for a hospital stay is $1,260. A person who is hospitalized once or more in a benefit period can incur substantial out-of-pocket costs and resulting financial hardship.
What Medicare Supplement Plans Cover
Medicare supplement plans cover copayments, coinsurance, and deductibles not covered by Original Medicare, as mentioned earlier. The plans also cover medical expenses when you’re outside the U.S. and some plans may also cover a percentage of the costs of mental health outpatient services and physical therapy.
What Medicare Supplement Plans Do Not Cover
Medicare Supplement plans don’t cover dental or vision care, hearing aids, eyeglasses, long-term care, nursing facility, private-duty nursing care, or prescription drugs (policies sold after January 1, 2006).
Five Things to Know About Medicare Supplement (Medigap) Insurance
- You must have Medicare Parts A and B in order to purchase a Medigap policy.
- You cannot purchase Medicare supplement insurance through the health insurance exchanges established by the Affordable Care Act (ACA). You must purchase the plan through a licensed insurance agent or directly from the private insurance carrier.
- The best time to purchase a Medigap plan is during your open enrollment period, which is the only time private insurers are required to sell you a policy without additional underwriting. If you purchase a plan outside of open enrollment, you could be denied coverage or pay more for a plan.
- During open enrollment you can buy a plan through any insurance company licensed to sell in your state.
- Although some Medigap plans covered prescription drugs in the past, any policy sold after January 1,
2006 does not cover prescription drug coverage. Those who want prescription drug coverage will need to purchase a Medicare Part D prescription drug plan. Alternatively, a person can purchase a Medicare Advantage plan (Part C) that includes prescription drug coverage.
Can I Have Medigap with a Medicare Advantage (MA) Plan?
You cannot have both a Medigap plan and a Medicare Advantage (MA) plan. MA plans become primary to Original Medicare (Parts A and B), often have fewer out-of-pocket costs, and many MA plans cover prescription drugs. Some people find having a Medicare Advantage plan preferable to having Original Medicare along with a Part D prescription plan and a Medigap plan.
Where and When Can I Buy a Medigap Plan?
You can purchase a Medigap plan through any agent licensed in your state to sell plans. Medigap plans are standardized and are given a letter code from A-N. It’s important to carefully review the benefits of each plan with an insurance agent to determine which plan best meets your needs.
Timing is critical when purchasing a Medigap plan. The open enrollment period begins six months before the first day of the month of your 65 th birthday—but you must also be signed up for Medicare Part B in order to enroll in a Medigap plan during that time.
During your open enrollment period you can purchase a Medigap policy without underwriting. If you try to purchase a plan outside the open enrollment period, you are subject to the insurer’s underwriting process and could be denied coverage; or, if you do get coverage, it could be considerably more expensive. This is why it’s so important to plan well ahead of your 65 th birthday.
Call the experts at CA Medicare for a thorough evaluation of all your Medicare options and enrollment assistance.
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