Medicare provides coverage for a wide array of medical and drug benefits, but with its deductibles, cost-sharing requirements, and lack of an annual out-of-pocket spending limit, approximately 23 percent of all Medicare beneficiaries purchase supplemental insurance to help cover their out-of-pocket costs.
Here are a few things to consider when purchasing a Medicare Supplement (Medigap) policy.
•Your best time to buy a Medicare Supplement policy is when you’re first eligible. The best time to buy a policy is during your Medicare Supplement Open Enrollment Period. This is different from the Annual Open Enrollment Period that occurs every fall. Under Federal law the Medicare Supplement Open Enrollment period lasts for six months. It starts on the first day of the month in which you are enrolled in Medicare Part B whether you are over age 65 or under 65 and disabled. If you have Medicare due to a disability you will have a second open enrollment when you turn 65. When you buy a Medicare Supplement policy you get a 30-day free look period. If you change your mind within 30 days of your policy effective date you can cancel it and get a refund.
•Medicare Supplement plans are standardized. Medicare Supplement plans are standardized meaning that each plan of the same letter (designated A through N) must offer the same basic benefits, regardless of which insurance company sells it. To see a chart of the different plans and benefits for particular Medicare Supplement plans you may refer to page 11 in the 2017 Choosing a Medigap policy: A Guide to Health Insurance for People with Medicare which can be found at www.medicare.gov/Pubs/pdf/02110-Medicare-Medigap.guide.pdf
•Insurance companies price their Medicare Supplement plans differently. The cost of Medicare Supplement plans can vary widely. Different insurance companies charge different premiums for the same coverage. The cost of these plans may depend on whether the company offers discounts. The system the company uses for rating their premiums can also affect the cost. There are three types of premium ratings:
Community rated: The same monthly premium is charged to everyone who has the Medicare supplement policy and lives in the designated geographic area, regardless of age. Premiums are the same no matter how old you are.
Issue age rated: The premium is based on the age you are when you buy the plan. Premiums are lower for younger buyers and won’t changes as you age other than adjustments for inflation or annual cost increases.
Attained age rated: The premium is based on your current age so the premium goes up as you age. Premiums are low for younger buyers, but go up as they get older and can eventually become the most expensive plan options.
•Medicare Supplement plans don’t cover everything. Most Medicare Supplement policies do not cover benefits that are not otherwise covered by Medicare. For instance, they generally don’t cover long-term care, vision or dental services, hearing aids, eyeglasses, or private-duty nursing services.
•You can’t combine a Medicare Supplement with certain types of health insurance. Medicare Supplement plans are meant to work with Original Medicare (Part A and Part B). It may be illegal for an insurance company to sell you a Medicare Supplement plan if you have another type of insurance, such as Medicare Advantage or Medicaid. If you have a Medicare Advantage plan, you can only apply for a Medicare Supplement policy if you are planning to return to Original Medicare. None of the Medicare Supplement plans sold today includes prescription drug coverage, but you can add a Medicare Part D prescription drug plan to your Original Medicare and Medicare Supplement coverage.
•In most cases, you cannot be dropped by your Medicare Supplement plan. If you bought your policy after 1990, the policy is guaranteed renewable. This means your insurance company can only drop you under very limited circumstances, such as if you stop paying your premium, you weren’t truthful on your policy application, or the company becomes bankrupt or insolvent. During the period of your guaranteed issue rights, an insurance company can’t charge you more for a Medicare Supplement policy because of past or present health problems.
•Make sure the insurance company is reliable. Check with the Pennsylvania Department of Insurance at www.insurance.pa.gov to confirm that the insurance company is licensed to do business in the Commonwealth. You can also find out which insurance companies sell Medicare Supplement policies in your area by visiting the Medicare Supplement policy search tool at: www.medicare.gov or by calling 1-800-MEDICARE. You can also get free and unbiased assistance from your local APPRISE program.
•Watch out for illegal insurance practices. It is illegal for anyone to pressure you into buying a Medicare Supplement policy, lie or mislead you to switch to another company or sell you a second policy when they know that you already have one.
Original Date: Oct 24 2017