5 Things To Know Before Choosing A Medigap Plan

Choosing a Medigap plan is an important decision for anyone enrolled in Medicare, as it can significantly impact your healthcare costs and coverage. Medigap, also known as Medicare Supplement Insurance, helps cover some of the healthcare costs that Original Medicare does not cover, such as copayments, coinsurance, and deductibles. Here are five crucial things to know before choosing a Medigap plan, elaborated in detail to guide your decision.

Understand What Medigap Covers and Doesn’t Cover

Medigap plans are designed to fill the “gaps” in Original Medicare. However, it’s essential to know exactly what they cover and what they don’t.

What Medigap Covers:

Copayments and Coinsurance: Medigap can help pay for the cost-sharing aspects of Medicare, such as Part B copayments and coinsurance.

Deductibles: Some Medigap plans cover Part A and Part B deductibles.

Foreign Travel Emergency: Many Medigap plans cover emergency healthcare services when you travel outside the U.S., usually up to 80% of the cost.

Excess Charges: Certain plans cover Part B excess charges, which are the amounts a doctor can charge above Medicare’s approved amount.

What Medigap Doesn’t Cover:

Prescription Drugs: Medigap plans sold after January 1, 2006, do not include prescription drug coverage. For this, you need a Medicare Part D plan.

Long-term Care: Medigap does not cover long-term care, such as extended stays in nursing homes or custodial care.

Vision, Dental, and Hearing: Routine vision, dental, and hearing care are not covered by Medigap plans.

Private-duty Nursing: Services of private-duty nurses are not included.

Understanding these aspects will help you determine if a Medigap plan meets your healthcare needs and if you need additional insurance, like a Medicare Part D plan for prescription drugs.

Compare the Different Standardized Medigap Plans

Medigap plans are standardized across most states, offering the same basic benefits regardless of the insurance company. The ten standardized plans are labeled A, B, C, D, F, G, K, L, M, and N.

Key Features of Popular Plans:

Plan F: Known for its comprehensive coverage, covering all gaps in Original Medicare, including Part A and B deductibles. However, it’s no longer available to new Medicare enrollees after January 1, 2020.

Plan G: Offers the same benefits as Plan F except for the Part B deductible. It’s a popular choice for those who are newly eligible.

Plan N: Generally has lower premiums but requires copayments for some services, such as $20 for some office visits and $50 for emergency room visits.

High-Deductible Plans:

Plan F and Plan G also have high-deductible versions, which can offer lower premiums in exchange for higher out-of-pocket costs before coverage kicks in.

Comparing these plans will help you find the one that best fits your health needs and financial situation. Consider how often you visit the doctor, the frequency of your healthcare services, and your budget when making a decision.

Consider the Cost and How it May Change Over Time

The cost of Medigap plans can vary significantly between insurance companies and can also change over time. There are three primary ways that insurance companies set premiums:

Community-rated (no-age-rated): Premiums are the same regardless of age.

Issue-age-rated (entry-age-rated): Premiums are based on your age when you buy the policy, and they won’t increase due to your age but may increase due to inflation or other factors.

Attained-age-rated: Premiums are based on your current age and increase as you get older. They may start low but can become the most expensive over time.

Additional Costs:

Household Discounts: Some insurers offer discounts if more than one person in your household has a Medigap policy.

Payment Options: Paying annually rather than monthly or setting up automatic payments might reduce your overall cost.

Understanding how premiums are determined and the potential for increases over time will help you plan for future healthcare costs and avoid surprises.

Timing Your Enrollment

The timing of your Medigap enrollment can significantly impact your options and costs.

Open Enrollment Period:

This six-month period begins the first month you are 65 or older and enrolled in Medicare Part B. During this time, you can buy any Medigap policy sold in your state without medical underwriting. This means you cannot be denied coverage or charged more due to pre-existing conditions.

Guaranteed Issue Rights:

In certain situations, such as losing other health coverage or your Medicare Advantage Plan ending, you have the right to buy a Medigap policy without medical underwriting. These rights are limited in time and circumstances, so it’s crucial to act quickly if you qualify.

Outside Open Enrollment:

If you apply for Medigap outside the open enrollment period, insurers may require medical underwriting, and they can deny coverage or charge higher premiums based on your health status.

Taking advantage of your open enrollment period or guaranteed issue rights can ensure you get the coverage you need at the best possible price.

Evaluate the Insurance Company and Its Reputation

Not all insurance companies are created equal, and it’s essential to evaluate their reputation and reliability.

Factors to Consider:

Customer Service: Look for reviews and ratings from current and past policyholders. Good customer service is vital, especially when dealing with claims or billing issues.

Claims Processing: Find out how quickly and efficiently the company processes claims. A company with a good track record for quick claims processing can save you a lot of hassle.

Rate Increases: Research the company’s history of rate increases. Companies with a history of large or frequent rate hikes might be less desirable in the long run.

Additional Resources:

State Insurance Department: Your state’s insurance department can provide information on complaints against insurers and other relevant data.

Independent Reviews: Websites that aggregate insurance reviews and ratings can offer a broader perspective on an insurer’s performance.

Evaluating the reputation and reliability of an insurance company ensures that you choose a provider who will be there when you need them and will handle your claims efficiently and fairly.

Choosing the right Medigap plan involves careful consideration of what each plan covers, the costs associated, the timing of your enrollment, and the reputation of the insurance company. By thoroughly understanding these five key areas, you can make an informed decision that best meets your healthcare needs and provides peace of mind. Taking the time to compare plans, consider future costs, and evaluate insurers will help you secure the coverage you need to complement your Medicare benefits effectively.