Less expensive plans have fewer benefits and higher out-of-pocket costs. More expensive plans include extra benefits, like some Medicare deductibles, additional hospital benefits, at-home recovery, and more. You have to decide what sort of plan makes the most sense for you. If you drop your Medigap policy, there is no guarantee you will be able to get it back.
Some Medigap plans used to cover prescription drugs. Since the introduction of the Medicare Prescription Drug Plan (Part D), you can no longer sign up for these plans. If you already have a Medigap plan that covers prescriptions, however, you can keep it.
For more information about Medigap plans, see the Medicare web site at www.medicare.gov or call 800-MEDICARE (1-800-633-4227).
Medicare supplement plans don’t work like most health insurance plans. They don’t actually cover any health benefits. Instead, these plans cover the costs you’re responsible for with Original Medicare.
These costs can include:
- Your coinsurance
- Hospital costs after you run out of Medicare-covered days
- Your Medicare deductibles
- Skilled nursing facility costs after you run out of Medicare-covered days
Here’s how it works: You pay a monthly premium for your Medicare supplement plan. These plans are also called Medigap. In return, the plan pays most of your out-of-pocket expenses. So when you go to the doctor, for example, you don’t have to pay the 20 percent coinsurance required by Medicare. Your Medigap plan pays it for you. With some Medigap plans, you might have a copay instead of the 20 percent coinsurance.
Medicare supplement plans aren’t your only option. Medicare Advantage plans help with your Medicare costs, too. They also offer additional health coverage that Medicare supplement plans don’t.
The table below breaks down the differences between Medicare supplement plans and Medicare Advantage plans. It might be a good place to start if you’re wondering which type of plan is right for you.
Standard Medigap plans are labeled A through N and offer different levels of health coverage. Plans E, H, I, and J are no longer available to new subscribers.
Premiums vary among insurance companies, but the benefits of each standard Medigap plan are always the same. For instance, a Medigap Plan C policy offers set benefits no matter which company you buy it from. However, standard Medigap policies are different in Massachusetts, Minnesota, and Wisconsin.
If you are going to buy a Medigap plan, the open enrollment period is six months from the first day of the month of your 65th birthday– as long as you are also signed up for Medicare Part B– or within six months of signing up for Medicare Part B. During this time, you can buy any Medigap policy at the same price a person in good health pays. If you try to buy a Medigap policy outside this window, there is no guarantee that you’ll be able to get coverage. If you do get covered, your rates might be higher.
For a Medigap plan, you pay a monthly premium to the insurance company in addition to your Medicare Part B premium. The cost of your Medigap policy depends on the type of plan you buy, the insurance company, your location, and your age. A standardized Medigap policy is guaranteed renewable– even if you have health problems– if you pay your premiums on time.