As people move closer to their Medicare effective date, they begin to stress over whether or not they should get a Medicare Supplement plan. The decision is usually difficult because they aren’t fully aware of how Original Medicare and Medicare Supplement plans work together.
Many people think that Medicare Supplement plans are to help cover services and procedures that Original Medicare doesn’t cover at all. These beneficiaries become disappointed once they figure out this isn’t the case. Instead, these plans supplement the portion that Medicare pays toward covered services.
Medicare Supplement plans are also called Medigap plans. This nickname was adopted because this type of plan covers the gaps within Medicare. Hence the name Medigap. The gaps Medicare is referring to are the cost-sharing expenses that you would normally pay yourself. These include, deductibles, copayments, and coinsurance.
Other Misconceptions of Medicare Supplement Plans
Because Medicare Supplement plans don’t cover services and procedures that Medicare doesn’t, your Medicare Supplement plan only pays when Medicare first approves and pays its share of your claim.
For example, let’s say that you have a doctor visit and your bill gets sent off to Medicare. Medicare pays its portion (if you have met your deductible) and then sends your bill to your Medicare Supplement plan. From there, your Medicare Supplement plan will pay according to its coverage guidelines. If any amount is left unpaid, the remainder will be sent to you.
Although this is a common misconception, it’s not the most common one. A question that people ask even more frequently is, “Do Medicare Supplement plans cover prescription drugs?”
No matter which Medicare Supplement plan you choose, it will not cover medications. However, you can enroll in a standalone Part D drug plan to go alongside that coverage.
The type of plan that usually includes drug coverage is Medicare Advantage. Beneficiaries often confuse Medicare Supplement plans with Medicare Advantage plans. The two types of coverage work very differently, and beneficiaries will typically choose one or the other. It will be your choice whether you want a Medicare Advantage plan or a Medicare Supplement plan.
Coverage for Health Conditions
Many people with health conditions purchase a Medicare supplement to help them pay for cost-sharing items they know they’ll encounter. Even without any health conditions, it’s good to purchase coverage because you never know when you might get sick down the road.
In 2018, the Part A deductible is $1,340. Let’s say you’re admitted into the hospital for outpatient surgery. You receive a bill for the Part A hospital deductible and the 20% you owe for your surgery under Part B. That bill alone could easily be thousands of dollars.
Now, let’s say you had a Medicare Supplement plan for $125/month. The majority of Medicare Supplement plans cover the Part A deductible and the 20% Part B coinsurance. This means the $1,500 you’ll spend in one year for your Medicare Supplement plan would protect you from spending thousands on one medical bill.
Don’t Miss Your Open Enrollment
Open Enrollment is the absolute best time to apply for a Medicare Supplement plan. This is because the Open Enrollment is a time when you don’t have to answer health questions on your application. You won’t be turned down due to your pre-existing conditions.
Your Open Enrollment depends on when your Part B effective date is. Usually, your Part B effective date is the first day of your 65th birthday month. Your Open Enrollment lasts for 6 months following your Part B effective date. You do not want to miss your Open Enrollment, especially if you have health conditions. You may not get another chance to get approved for coverage.
Planning for Future Needs
As we mentioned, even if you’re healthy, you should still consider enrolling in supplemental coverage during your Open Enrollment. Imagine that you’re 70 years old and still only have Original Medicare. You receive some of the worst news you’ve ever gotten; you’ve been diagnosed with cancer.
You now realize that you need a Medicare Supplement plan to help with the medical expenses you are about to endure. Unfortunately, you’re turned down during the underwriting portion of your application because the insurance carrier knows that you are about to go through some pretty steep medical costs.
Now, in this scenario, you could still qualify for a Medicare Advantage plan which will give you some coverage and an out-of-pocket maximum cap on your annual spending as well.
However, you can only enroll in a Medicare Advantage plan during certain election periods. Let’s say you’re diagnosed in April. You have to wait until the AEP starts on October 15th to apply for a Medicare Advantage plan. When you apply during the AEP, your coverage doesn’t start until January 1st. This means you have to go nearly 9 months without any kind of supplemental coverage.
Medicare beneficiaries in Texas are most attracted to Medigap Plan F, G, and N. Medigap Plan A is another popular plan in Texas because it is the only plan carriers are required to offer people who have Medicare under 65 due to a disability.
Medigap Plan F, G, and N are the most popular Medicare Supplement plans in Texas today. The most comprehensive Medigap plan is Plan F. It covers all gaps within Original Medicare at 100% including 80% coverage for foreign travel emergency.
Plan G covers everything exactly like Plan F, except it does not cover the Medicare Part B annual deductible. As of 2018, the Part B deductible is $183. Since Plan G’s monthly premium is usually less than Plan F’s, most people find Plan G to be more cost-effective.
Plan N covers everything that Plan G covers except for Part B excess charges. In addition, beneficiaries who have Plan N will pay copays for doctor visits and emergency room visits. If you don’t plan go to the doctor often, Plan N might be a good choice for you.
Don’t Gamble with Your Healthcare
Don’t think just because you don’t currently have any health issues, that you won’t have any in the future. Contact us today to investigate which supplemental coverage would best fit your needs and budget.