Medicare Supplement the right coverage for me?
What’s a Medicare Supplement?
What’s a Medicare supplement?
A Medicare supplement is a type of health insurance plan that helps fill in the gaps of Medicare. This is why Medicare supplements are also known as Medigap plans.
Basically, Medicare supplement first pays its share of your medical bills. Then the supplement you choose steps in and pays its share. Depending on the supplement you choose, it could cover the entire amount of Medicare approved charges. So you don’t have any extra costs.
Doesn’t Medicare cover everything?
No.
Medicare does NOT cover everything. There are some gaps like deductibles, coinsurance, and copayments.
If you are turning 65, odds are you will be enrolling in Medicare for the first time in your life. I know it can be overwhelming trying to sort through 100 different options.
Here’s some of the things that you need to have a plan on how to pay. Don’t worry, Medicare supplements help with this.
With just Original Medicare you have to pay this when you use your coverage:
- Part A deductible – $1,484 each period. A period is 60 days. So you could potentially pay this multiple times per year
- Part B deductible – $203 annual deductible
Then after you meet these deductibles you still have ongoing costs:
Part A co-insurance
- $185.50 per day for days 21-100 in a skilled nursing facility
- $371 per day for days 61-90 in a hospital
- $742 per day for 60 days after your first 90 days in a hospital
Part B co-insurance
20% of part B bills with no cap. Whatever you medical bills cost you are responsible for 20%. 20% of 1,000 is another $200. But 20% of $50,000 is $10,000 you have to pay.
Part B excess charges
some providers will bill Medicare but not accept assignment. This means that Medicare only pays what they think they should pay. And the doctor can charge an extra 15% on top of that. So you have to pay your 20% of what Medicare thinks they should pay plus the entire 15% extra the doctor is charging.
Why buy a Medicare supplement?
A Medicare supplement helps fill in the gaps of Original Medicare. You have some options on how comprehensive you want it to be. So depending on which plan you choose, the insurance company pays some or all of the costs mentioned above for you.
This gives you the predictability of paying a monthly premium and being able to budget for that. Many people prefer this to the unknown of having a large medical bill pop up out of nowhere.
You also get the flexibility to see any doctor or hospital nationwide. All you have to ask is if they accept Medicare. And most doctors do accept Medicare.
As long as they accept Medicare, they will accept any and all Medicare supplements. The good news for you is that Medicare decides what’s covered and how it’s covered. You don’t have an insurance company making you jump through hoops to get the care you need.
Supplements are standardized
That’s right. Medicare supplements are standardized so it’s easier for you to compare.
Each standardized plan is identified by a letter. There is Medigap/Medicare supplement plan:
- Plan A
- Plan B
- Plan C
- Plan D
- Plan F
- Plan G
- Plan K
- Plan L
- Plan M
- Plan N
Each one of these plans with the same letter provides the same benefits regardless of the company you choose.
So a Plan G from one company covers the same bills at the same doctors and hospitals as a Plan G from any other company.
But they can charge very different prices for that same Plan G.
The 3 most popular plans are:
Here’s my comparison on which Medigap offers you the best value.
Wisconsin Standardized Supplements
If you aren’t in Wisconsin then skip to the next section.
47 states follow the Medicare standardized guidelines. But 3 states opted out of those and follow their own guidelines. This includes:
- Wisconsin
- Minnesota
- Massachusetts
Wisconsin is considered a rider state. Basically we start with a base plan and add riders to it. The riders make the coverage more comprehensive. As it gets more comprehensive, the price increases since it covers more.
There are 7 riders to choose from in Wisconsin. But most people in Wisconsin who start Medicare in 2020 or later are choosing their plans in 1 of these 2 combinations.
Option 1 – This is similar to Plan G in other states
The Basic plan with riders 1, 3, 6, and 7 added. This is the most comprehensive option leaving you with the responsibility of paying the Medicare Part B deductible which is $203 in 2021.
- Part A deductible
- Insurance company pays $1,484 deductible
- You pay $0
- Part B excess charges
- Plan pays 100%
- You pay $0
- Foreign travel rider
- Plan pays 80% of costs up to $50,000 after you meet deductible
- You pay $250 deductible
- Home Health Visits
- Plan pays 100% for 365 calendar year visits
- You pay $0
Option 2 – This is similar to plan N + covers Part B excess charges
The Basic plan with riders 1, 3, 5, 6, and 7 added. There is more out of pocket cost in this option but in return you have a lower monthly premium. The extra costs would be the part B deductible ($185 in 2019) and after that deductible a co-payment of up to $20 for a Dr. visit and up to $50 for an emergency room visit.
- Part A deductible
- Insurance company pays $1,484 deductible
- You pay $0
- Part B copayment
- You pay $203 part B deductible and after that $20 for a doctor visit and $50 for an emergency room visit
- Insurance company pays 100% after you’re your deductible and copay
- Part B excess charges
- Plan pays 100%
- You pay $0
- Foreign travel rider
- Plan pays 80% of costs up to $50,000 after you meet deductible
- You pay $250 deductible
- Home Health Visits
- Plan pays 100% for 365 calendar year visits
- You pay $0
Is a more expensive Medicare supplements better?
It depends, but many times no.
Remember, the coverage depends on what plan letter you choose. So a Plan G covers all the same bills regardless of you who choose to get it from. But some companies charge TWICE AS MUCH as others for the exact same Plan G coverage.
That being said, a Plan G is usually more expensive than a Plan N. This is because a Plan G covers more than a Plan N does. So in this example, you are paying a higher premium for extra coverage.
What’s NOT covered by a Medicare supplement?
There are certain things not covered by Medicare which are also not covered by a Medicare supplement.
Some of the more common things not covered are:
- Prescription medication – this can be covered by a Medicare Part D/prescription drug plan
- Dental or Vision
- Long term care
There are different types of insurance that can be used to help reduce the costs of these for people who are concerned about that exposure.
How do I choose the Medicare supplement for me?
Since Medicare supplement plans are standardized, you know exactly what coverage you will get before you actually choose the company. Also, all Medicare supplements are guaranteed renewable. Which means you don’t have to reapply each year.
There are several things to consider including:
Initial premium
Is this price low or high? Is it an intro “teaser” rate that jumps a lot after one year?
You don’t want to overpay for something that is identical to everyone else. So higher isn’t better. And lowest may or may not be the right one for you to choose depending on the company that is offering that low price.
History of rate increases
Most policies have an annual increase to keep up with medical inflation. What’s been the average increase over the past few years? Is this significantly higher or lower than other companies?
Financial Ratings
There are several ratings companies that research the financial stability of insurance companies. They give reports which are often grades on the financial health of the company. A low financial rating is a concern because they may need larger than average increases to increase their balance sheet.
How many people do they insure?
Is this company new to Medicare supplements? Or do they only insure a small number of people?
Insurance is sharing risk with other people. You want to share that risk with a lot of people so that one person’s claims have a small impact on the total cost of claims for that company. For this reason, it often makes sense to go with a larger company instead of a smaller one. Especially if the pricing is similar.
How is their customer service?
Medicare will decide what is covered and how it’s covered. As long as the doctor or hospital accepts Medicare, you will not see a difference as far as the company is involved.
So what customer service is there to consider?
Well let’s say your information was hacked and you need to change your automatic payment information. How hard is that for you to do? Can your agent help with that? Or are you on your own calling through a phone tree?
Now what?
The good news is I am an independent Medicare insurance broker. I work with a bunch of different companies and have done this background work for you. I can share pricing of 20+ companies with you. And I can tell you which ones I would avoid based on the reasons I mentioned earlier.
You get 1 person to work through instead of making 10 different calls to 10 different companies.
What does this cost?
My services are 100% free. And there is no obligation. If we decide to work together, then the company you choose to enroll with compensates me. But they do not charge you one penny more for using me as a resource.
In addition to Medicare supplements, I can also help you review your options including:
- Medicare Advantage
- Prescription Drug Plans
- Dental, Vision, and Hearing
Call me directly at 1-855-712-7316 or email me Mike@askMedicareMike.com or fill out the form below. or fill out the form below. Your information will never be sold, and I’ll only call you if you ask. See, no phone number required.