You may know that you are eligible for Original Medicare after
you turn 65 years old. Original Medicare includes Part A
hospital insurance and Part B medical insurance. What you might not
realize is that Medicare isn’t offered free of charge—at least not for most
people. You likely will pay at least a portion of your insurance premium, a 20%
coinsurance rate, as well as copayments and deductibles.
Luckily, you have the option to purchase a Medicare
Supplement insurance plan to cover some of these out-of-pocket costs. But how
much do plans cost? And how do you determine what policy option is right for
you? We’re breaking it down:
What
Is Medicare Supplement Insurance?
Medicare Supplement insurance, or Medigap, works
with Original Medicare (Parts A and B). A Medigap policy can help you to pay
for some of the out-of-pocket costs not covered by Original Medicare, including
copayments, coinsurance, and deductibles.
Most Medicare Supplement plans do not require referrals and
allow you to visit any provider in and out of your state, as long as they
accept Medicare insurance. Medicare Supplement policies are offered by private
insurance companies, and you must have Medicare Part A and B to qualify for
this benefit. Medigap is not available with Medicare Advantage (Part C) plans.
How Medigap works:
1.
You pay an insurance company a
monthly premium for your Medigap policy. (This is in addition to the premiums
you pay for Original Medicare)
2.
Medicare will pay for pre-approved
amounts of covered health care costs.
3.
Your Medigap policy covers its share
of the remaining costs.
What
Types Of Plans Are Available?
Medigap policies must follow federal and state laws.
Insurance companies can only sell standard policies that are clearly identified
as “Medicare Supplement insurance.”
Most states identify plans by letters*, like with other
Medicare plans. All 10 policies, labeled A, B, C, D, F, G, K, L, M and N, offer
the same standard benefits. Extra benefits are offered to differentiate between
them.
Medicare Supplement Plans
|
Benefit
|
A
|
B
|
C
|
D
|
F
|
G
|
K
|
L
|
M
|
N
|
|
Part A coinsurance and hospital
costs
|
100%
|
100%
|
100%
|
100%
|
100%
|
100%
|
100%
|
100%
|
100%
|
100%
|
|
Part B coinsurance or copayment
|
100%
|
100%
|
100%
|
100%
|
100%
|
100%
|
50%
|
75%
|
100%
|
100%
|
|
Blood (first 3 pints)
|
100%
|
100%
|
100%
|
100%
|
100%
|
100%
|
50%
|
75%
|
100%
|
100%
|
|
Hospice care coinsurance or
copayment
|
100%
|
100%
|
100%
|
100%
|
100%
|
100%
|
50%
|
75%
|
100%
|
100%
|
|
Skilled nursing facility
coinsurance
|
0%
|
0%
|
100%
|
100%
|
100%
|
100%
|
50%
|
75%
|
100%
|
100%
|
|
Part A deductible
|
0%
|
100%
|
100%
|
100%
|
100%
|
100%
|
50%
|
75%
|
50%
|
100%
|
|
Part B deductible**
|
0%
|
0%
|
100%
|
0%
|
100%
|
0%
|
0%
|
0%
|
0%
|
0%
|
|
Part B excess charges
|
0%
|
0%
|
0%
|
0%
|
100%
|
100%
|
0%
|
0%
|
0%
|
0%
|
|
Foreign travel exchange
|
0%
|
0%
|
80%
|
80%
|
80%
|
80%
|
0%
|
0%
|
80%
|
80%
|
|
Out-of-pocket limit
|
–
|
–
|
–
|
–
|
–
|
–
|
$5,880
|
$2,940
|
–
|
–
|
Insurance companies do
not have to offer all 10 policies. They must offer Plan A and either Plan C or
F.
*Medigap policies are standardized in a different way in
Massachusetts, Minnesota and Wisconsin.
** As of January 1, 2020, Medicare Supplement insurance
plans are not able to cover Plan B deductibles for those newly eligible for
Medicare benefits.
Related: Medicare Must-Knows
How
Much Does Medigap Cost?
The price, or premium, of each Medicare Supplement plan is
set by each individual insurance carrier. The average cost of Medicare
Supplement plans can range anywhere between $50 and$300 for monthly insurance
premiums.
The way these prices are set can affect both your current
and future Medigap premiums. It is important to ask your insurance company how
costs are determined.
Medigap policies are typically priced, or rated, in three
different ways:
1.
Community-rated (also called “no
age-rated”) – The same premium is charged to everyone, regardless of age.
2.
Issue-age-rated (also called “entry
age-rated”) – Premiums are based on your age when you buy, or were issued,
the policy.
3.
Attained-age-rated – The
premium is based on your current age, so it will go up as you get older.
Other factors that influence Medicare Supplement insurance
premiums include:
·
Geographic
area – Specific state rules can
impact the cost of insurance premiums.
·
The
insurance company – If a company has more members
paying into it, then individual premiums can be lower for everyone. It also
depends on how strict an insurer’s underwriting policy is. Who they approve or
deny for coverage can also impact the number of health claims that need to be
covered.
·
Discounts – Many insurance carriers offer policy discounts for a
variety of reasons, such as for non-smokers, paying yearly, paying by
electronic transfer, or having multiple policies.
·
Type of plan – Premium costs vary depending on which plan you
choose. For example, Plan A will have a lower premium than Plan N but won’t
cover as much. You also may have lower premiums if you choose a Medicare SELECT
policy or for high-deductible plan options.
·
Open
enrollment period – Insurance
companies may charge a higher premium if you purchase a Medigap policy outside
of the Medicare Open Enrollment Period.
What
Is A Medicare Supplement Deductible?
The Medicare Supplement deductible, just like with other
types of insurance, is the amount of money you pay before your insurance covers
the costs for you. Depending on your Medigap policy, the amount you have to pay
in first can vary. Often a low premium means a higher deductible.
Where
Can I Go To Learn More?
The best way to do a Medicare Supplement plans cost
comparison is to shop around. With a variety of plans and insurance carriers to
choose from, you are bound to find a Medigap policy to suit your health needs
and budget.
Visit MedicareExpertUSA.com to
get free quotes from insurance carriers who offer Medicare Supplement insurance
in your coverage area.
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