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Medicare Supplement Plans and How Do They Work?

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A Medicare Supplement plan, also known as Medigap, is an insurance policy that supplements Original Medicare. It is sold by private insurance companies and is an optional plan. It covers the gaps in Original Medicare and pays for costs like coinsurances, deductibles, and copayments. You may have heard of the popular supplemental plans before. Perhaps you’ve heard of Plan F, the most popular plan amongst beneficiaries.

Medigap plans will not cover costs under other types of health coverage like prescription drug plans, Medicare Advantage plans, Tricare, or Medicaid. Suppose you have coverage through a Medicare Advantage plan or Medicaid. If you haven’t, you may wonder what is Plan F or Plan G? This article will go over the Medigap plans and what they cover.

What is Medicare Supplement insurance?

As mentioned above, Medicare Supplements cover the gaps in Original Medicare. There are many advantages to a supplemental plan:

  • The ability to choose which doctors and hospitals you go to
  • No referral needed to see a specialist
  • The out-of-pocket costs are predictable for Medicare-covered services
  • You are covered nationwide; you can use it anywhere in the U.S.
  • Guaranteed renewability (the insurance company can’t drop you or change coverage because of a health condition)

When you buy a supplemental plan, you know what’s covered for your outpatient or inpatient procedures. To buy a Medigap plan, you must already have Part A and Part B. You cannot enroll without having Part A and Part B first.

What do the Medigap policies cover?

There are ten standard Medicare supplements. Medigap Plan A, B, C, D, F, G, K, L, M, and N. The most popular supplements are Plans F, G, and N. The coverage differs for each plan. The benefits of picking up a Medigap plan are listed below:

Medigap Plan benefits include:

  • Medicare Part A coinsurance + hospital costs
  • Medicare Part B coinsurance
  • First 3 pints of blood
  • Part A hospice care coinsurance
  • Skilled nursing facility coinsurance
  • Medicare Part A & B deductible
  • Medicare Part B excess charges
  • Foreign travel emergency

Do all plans cover the same benefits?

Not all Medigap plans have all the benefits listed above; some only have a few of them – however, Plan F has them all. Plan F is the most comprehensive supplement plan on the market. Plan F leaves you with no out-of-pocket costs for Medicare-approved services.

Unfortunately, Plan F is only available to those who became eligible for Medicare before January 1, 2020. If you became eligible for Medicare after January 1, 2020, you’ll find Plan G to be the most comprehensive. Plan G is the second most popular Medicare Supplement plan. 

Choosing a Medicare Supplemental plan

Due to Medigap plans being standardized, you’ll know what benefits you’re purchasing. When choosing a Medigap plan, you’ll want to consider a few factors about the insurance carrier before choosing your supplement. You’ll want to know the rates, rate trend history, and financial ratings. The rate is also known as the Medigap premium. This is what the insurance company will charge you each month for your plan. You should examine if these companies are offering a low premium.

On top of that, what is the rate trend history? Policies will likely go up with inflation. Observing the type of rate increases that your carrier has had over the past couple of years can be helpful. Have the rate increases been reasonable? What is the company’s financial rating? Companies release reports on the fiscal health of the insurance company. Considering these three things will help you make a better decision for yourself and your health needs.

Conclusion

Private insurance companies sell Medicare Supplement plans as an additional option to your Original Medicare. Medigap plans cover the out-of-pocket costs that come with Original Medicare. You have the freedom to decide which doctor or hospital you want to go to, you don’t need a referral to see a specialist, and you are covered nationwide. There are ten standard plans, and each one offers different coverage. The coverage you want will differ by the plans. Researching the plans will help you make the best decision when it comes time to select your plan. Helpful research includes finding out the rates, the rate trend history, and the financial ratings of the insurance carrier.

 

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