Original Medicare, which consists of Medicare Part A and Part B, typically does not cover all of an individual’s health care costs. In order to fill the gap, many individuals purchase a Medicare supplement plan. Medicare supplement plans, also known as Medigap policies, are policies that can be purchased to cover expenses that Medicare does not pay.
The most common supplemental plans provide coverage for the out-of-pocket expenses that are not paid by Medicare, such as copays, deductibles, coinsurance, as well as some services that may not be covered by Medicare, such as international travel emergencies. Plans vary, so look for a plan that provides the coverage you need.
In order to be eligible for Medicare supplement plans, you must be enrolled in Medicare Part A and Part B, and you cannot be enrolled in a Medicare Advantage plan. If you are under 65 and receive Medicare as part of your disability benefits, you may be eligible to purchase a Medicare supplement plan depending on the state in which you live. In addition, only one person can be covered by each Medicare supplement plan. You will need to purchase separate policies if both you and your spouse want this type of coverage.
WHEN TO ENROLL
The ideal time to purchase a Medicare supplement plan is during your Medigap open enrollment period. This is the six-month period beginning on the first day of the month that you turn age 65 or older and enroll in Medicare Part B. During this period, you will not be denied coverage for any pre-existing health conditions. In other words, you can purchase a Medicare supplement plan of your choice for the same premium that a healthy person without pre-existing conditions would pay. If you do not enroll in a Medicare supplement plan during your Medigap open enrollment period, you will not be guaranteed coverage, and you may potentially be denied coverage or charged a higher premium due to your medical history or pre-existing health conditions.
HOW TO PURCHASE
Medicare supplement plans are sold by private insurance companies, and you will usually pay a monthly premium. Insurance companies selling Medicare supplement plans do not need to adhere to the same requirements as standard Medicare policies. This means that the cost of Medicare supplement plans can vary due to a number of factors, including the plan’s service area, your age when you enrolled in Medicare or your age when you enroll in a Medicare supplement plan. Because premiums and out-of-pocket costs can vary, it is a good idea to have your broker help you shop around. He or she can ensure you find the best rate and policy to suit your needs.
THERE ARE FOUR TYPES OF MEDICARE:
Medicare Part A
Medicare Part A helps cover inpatient care in hospitals, skilled nursing facilities, and hospice and home health care. Generally there is no monthly premium if you qualify and paid Medicare taxes while working.
Medicare Part B
Medicare Part B helps cover medical services like doctors’ services, outpatient care and other medically necessary services that Part A doesn’t cover. You need to enroll in
Medicare Part B and pay a monthly premium determined by your income, along with a deductible. Many people also purchase a supplemental insurance policy, such as a Medical plan, to handle any Part A and B coverage gaps.
Medicare Part C
Medicare Advantage Plans, also known as Medicare Part C, are combination plans managed by private insurance companies approved by Medicare. They typically are a combination of Part A, Part B and sometimes Part D coverage, but must cover medically-necessary services. These plans have discretion to assign their own copays, deductibles and coinsurance.
Medicare Part D
Medicare Part D is prescription drug coverage, and is available to everyone with Medicare. It is a separate plan provided by private Medicare-approved companies, and you must pay a monthly premium.