Medicare Supplement Insurance Plans [Definitive 2022 Guide]

— Last Updated May 27, 2022

Medicare Supplement Insurance Plans [Definitive 2022 Guide]

In this article

— Last Updated May 27, 2022

Read Time
7 mins
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Reviewed by
Eric Berkman
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Medicare Supplement Insurance Plans [Definitive 2022 Guide]

Stephanie Wilson

Director of Operations

Read Time

7 mins
Group-27.png

Reviewed by

Eric Berkman

In this article

medicare supplement insurance plans

Introduction 

Original Medicare is a coverage plan for medical expenses endorsed by the Federal Government. However, the coverage has gaps, and even with Original Medicare, you will have to copay and coinsure for some percentage of your healthcare costs.

That’s where Medicare Supplement Insurance plans come in. These cover the additional expenses depending on the plan in question. 

Their significant advantage is the option to pay an additional insurance premium monthly that can help to cover extensive medical bills or recurring medical bills that Original Medicare does not fully cover. 

Choosing whether you need supplemental insurance and which one is best for your particular situation are difficult questions that require some careful thought. 

The following article looks at the different available plans in detail and in which cases it might be prudent to purchase each one. You will get the answer to why is medicare supplement insurance important.

So, what are medicare supplement insurance plans?

What Is Medicare Supplement Insurance?

Definition

Medicare supplement insurance plans, or “Medigap,” provide further coverage of medical costs not covered by Original Medicare. Original Medicare covers much but not all of the cost of health care services and supplies but still has gaps in coverage. Choosing a Medicare supplement insurance helps to pay for the remaining costs of these health care services. 

Medicare Supplement Insurance plans aim to help pay for a more extensive range of covered health care costs than Original Medicare. It differs from a Medicare Advantage Plan because those plans are ways to get more Original Medicare benefits. In contrast, a Medigap policy’s purpose is to help further pay for the costs of Original Medicare benefits you already have.

All such policies are legally regulated by federal and states laws designed to protect the insured and are clearly identified as “Medicare Supplement Insurance.” This makes it harder for companies to confuse their customers, but the intricacies of medical insurance can still be challenging to comprehend fully. 

Eligibility

Medicare Supplement Insurance is made for adults 65 and old and persons with disabilities eligible for Original Medicare but would like even further coverage of the costs associated with the benefits Medicare provides.

Medicare Supplement Insurance is not connected with or endorsed by the U.S. government and adds to the monthly expense of one’s healthcare.

While this may be more expensive as coverage, as insurance, it has a few advantages. Both Medicare and Medigap insurance plans cover you for the same range of doctors across the U.S., and there is no need for a referral to these doctors. It is also possible to travel throughout the U.S. and find other doctors covered by the plan. The best thing you can do in the beggining is to get to know medicare vs medicaid.

Who Are Medicare Supplement Insurance Plans For?

Medicare Supplement Insurance is excellent for supplementing the coverage of persons with disabilities, End-Stage Renal Disease, and those over 65. 

medicare supplement insurance plans

It is possible to get Medicare Supplement Insurance outside of these requirements in some states, but it is not legally required. To be eligible for a Medicare Supplement Insurance plan, you must first be enrolled in Medicare Part A and Part B.

You can check with your State Insurance Department what rights you have to Medicare and Medicare Supplement Insurance under your state’s law. 

During a Medigap Open Enrollment Period, usually initiated once you turn 65. In some other instances, insurance companies must sell you any Medigap policy on their books. You cannot be denied due to pre-existing conditions, including disabilities and other health problems. You also cannot be charged a higher premium than others based on your current health status. 

The Medigap Open Enrollment Period is one of the most crucial times to choose your coverage as you are legally protected from having the most options available to you. 

Types of Medicare Supplement Insurance Plans

There are ten types of Medicare Supplement Insurance Plans, labeled by standardized letters. These are standardized across the United States, meaning that the only difference between insurance companies is which plans they offer to you and the costs of these plans. 

We will now go over each plan briefly and explain what supplement costs they cover.

All plans cover up to one year of hospital costs after Medicare runs out. All plans except plans K and L Part B coinsurance, up to 3 pints of blood, and Part A hospice care coinsurance costs. K and L cover 50% and 75% of those costs, respectively. 

  1. Plan A – contains no extras beyond covering the above.
  2. Plan B – covers the Part A deductible in addition to the above.
  3. Plan C – covers both A and B deductibles, skilled nursing facility care, and 80% of foreign travel exchange costs.
  4. Plan D – same as C but with no B deductible.
  5. Plan F – same as C, but with excess charge coverage if your doctor charades more than Medicare standard.
  6. Plan G – same as F but with no B deductible.
  7. Plan K – same as Plan A, but covers only 50% of the costs.
  8. Plan L – same as Plan A, but covers only 75% of the costs.
  9. Plan M – same as Plan A, but covers 50% of the Part A deductible and 80% foreign travel exchange costs.
  10. Plan N – same as Plan M, except covers 100% of the Part A deductible. 

What Is the Best Medicare Supplement Insurance Plan?

Plan C offers the most full coverage overall, only missing the excess charge coverage, which shouldn’t come up unless you go to a particular doctor. It has the benefit of covering essentially every scenario you can think of and thereby bringing full peace of mind. 

Of course, you’ll be looking at a high premium for Plan C. That’s why it is essential to consider your financial means along with the coverage that will be most valuable to you. An insurance advisor can help you with this, as well as do your own research.

medicare supplement insurance plans

One thing to consider is whether you need skilled nursing facility care and foreign travel exchange costs. It can make a big difference in your premiums to forgo cover on these items, but unfortunately, we never know if we might need nursing care one day.

Foreign travel coverage is the one you have the most control over yourself. If you plan on traveling quite a bit, you must select a plan with it covered. On the other hand, if you are unlikely to leave the country very often, then this is one part of a supplemental insurance plan you can forgo. 

That’s why Plan C is the safest choice overall, covering all the major options. However, it does depend on your specific situation. Your insurance premiums will be a big part of your financial life, so be sure to make your choice carefully.

Is Medicare Supplement Insurance Worth It?

There are two solid reasons to subscribe to Medicare Supplement Insurance plans.  

  1. Extra protection from unexpected costs. By purchasing supplemental insurance, you spread out those costs and protect yourself from large unexpected expenses. Of course, this is the main reason for any insurance and has to be tempered by expectations of how costly the actual unexpected events would be.
  2. Peace of mind. Even if you don’t end up using some of the coverage, the peace of mind may be worth it in itself. That is, while you may end up paying for more in premiums in the long run, the fact that any unexpected expenses are already paid for allows you not to have to worry about setting aside medical savings. 

Medigap plans are regulated by the federal government in terms of what they offer but not what they cost. Therefore, different companies and states can have different rates, which affect whether they might be worth the cost.

Comparing different companies and different rates across different states can help you figure out if it is worth it for you. Remember, the ten plan letters offer the same benefits across the entire country, meaning that premiums and your personal expected medical conditions and expenses are the only differences to consider.

Always make sure you are comparing plans by their benefit package. For example, comparing the price of a Plan A with a Plan A, a Plan D with a Plan D. Otherwise, the comparison won’t make sense.

How To Know if a Medicare Supplement Plan Is Worth It for You

Looking at the two good reasons above, you’ll want to do a calculator based on the premium cost against some of the high costs you might expect from your medical expenses. 

You’ll also want to consider whether, given your expected income at different ages, getting a certain insurance supplement will give you greater peace of mind. 

Travel is another consideration, as that can factor into some of the plans. It’s also a consideration that you have some control over, as you could forgo foreign travel to avoid the potential medical expense. Even if you are not actively changing your travel habits, knowing how often you plan to be out of the country can help you make the best decision.

Generally speaking, there is a medicare supplement plan that is worth it for you. The freedom of doctor choice, much lower out-of-pocket costs and general peace of mind are all well worth it for most people. 

  • Medicare Supplement Insurance plans help you to cover your copayments, coinsurance, and deductible.
  • Original Medicare doesn’t cover all the expenses for a wide range of medical services. 
  • Some plans cover travel outside of the United States
  • Original Medicare doesn’t have an out-of-pocket maximum, meaning major health emergencies and chronic conditions can pose a significant financial risk.

Where Can I Find Out More and Get Advice on Medicare Supplement Insurance Plans?

Today, you can find multiple insurance consultants on the internet. However, choosing the right advisor is another difficult task.

Policy solver has knowledgeable, licensed agents, and is here to help you navigate through your disability insurance journey. We are a team of professional insurance policy brokers and we can save you time and money, while finding the right policy for your specific needs.

Our experienced advisors will ask you a few questions to understand your unique situation and will come up with a comprehensive analysis of different insurance plans so they will be able to recommend the best policy at the best price for you.

So, what are you waiting for? Contact us or schedule a free consultation, and we will get back to you soon!

 

Sources:

  1. https://www.medicare.gov/supplements-other-insurance/how-to-compare-medigap-policies
  2. https://www.medicare.gov/supplements-other-insurance/whats-medicare-supplement-insurance-medigap
  3. https://www.medicare.gov/Pubs/pdf/02110-medicare-medigap-guide.pdf
  4. https://www.investopedia.com/articles/personal-finance/071014/medigap-vs-medicare-advantage-which-better.asp

 

December 1, 2021

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