The clock is ticking and it gets louder the closer you get to the magic age of 65. That’s when you sign up for Medicare. But there’s more than one way to receive Medicare coverage.
There are Medicare Advantage plans, sometimes referred to as all-in-one plans, because they provide medical coverage and can also provide benefits for vision, dental, hearing, and prescriptions.
There is Original Medicare, which comes packaged as Part A, which provides hospital insurance, and Part B, which covers doctor visits and outpatient services. There is no coverage for vision, dental, hearing or prescription drugs. Original Medicare pays 80% of approved expenses. The remainder comes out of your pocket. That’s why people often pair a Medicare Supplement plan, also known as a Medigap plan, with Original Medicare. A supplement pays the 20% not covered by Original Medicare.
Medicare Supplement 101
There are eight Medicare Supplement plans available to new enrollees, all identified by a letter—A, B, D, G, K, L, M, and N. Plans A and B are not the same as Medicare Parts A and B.
All plans are standardized by Medicare, which means the benefits of every plan of the same letter are exactly the same no matter which company you purchase a supplement from. Plan A from one company is exactly the same as Plan A from another company. Plan G from one company is exactly the same as Plan G from another company and so forth. The only difference is the price. All premiums are not created equal.
Once you’ve selected a supplement based on the benefits that fit your needs, then you have to choose a company you’re comfortable with. Your choice may be based on how long the company has been around, the price they’ll charge you, name recognition or other factors that give you confidence.
The Best Time to Choose a Medicare Supplement
The best time to buy a supplement policy is during your Open Enrollment Period. It’s a 6-month window that begins on the first day of the month in which you turn 65. Also, you must be enrolled in Medicare Part B before you can apply for a supplement policy.
The Open Enrollment Period is a guaranteed issue period. You can’t be turned down even if you have health issues. You can’t be asked any health questions when applying for any of the eight available supplement plans. You can’t be made to wait for supplement coverage. You will get the absolute best price, even if you have pre-existing conditions. And as long as you pay the policy premium, you can never be canceled.
In the future, if you decide to switch to another supplement plan or to a different company in order to adjust benefits or get a better price, you may be required to answer health questions and the insurance company may charge you more because of your health issues or decline you all together.
What if You Have Employer Health Coverage
If you currently have health coverage from an employer, apply for Medicare supplement insurance before that coverage ends. You can choose to start supplement coverage the day after your employer coverage ends.
You Only Need One Policy
Once you have a Medicare supplement policy, it’s illegal for an insurance company to sell you a second policy unless you tell them in writing that you intend to cancel the first policy. However, don’t cancel your old policy until the new on is in place and you decide to keep it.
One Person-One Plan
There is no such thing as a joint supplement policy. If both spouses want a supplement, then each must have their own policy. However, be aware that a household discount may be available when two people from the same address are both enrolled with the supplement provider.
To be eligible for the discount:
- You must apply for a Medigap plan at the same time as another Medicare-eligible adult or the other Medicare-eligible adult must currently be covered by a Medicare Supplement with the company.
- The Medicare-eligible adult must be either (a) your spouse; (b) someone with whom you are in a civil union partnership; or (c) be a permanent resident in your home.
- The household discount will only be applicable if a policy for each applicant is issued.
- The discounted rate will apply as long as both policies remain in force.
Not all insurance companies provide household discounts. Among the ones that do, discounts range from 5% to 14%.
What Doctors You Can See
Unlike Medicare Advantage plans which require you to use in-network doctors, Medicare Supplement plans allow you to see any doctor or hospital that accepts Medicare patients. There are no networks and you don’t need a referral to see those doctors.
Supplements Don’t Cover Everything
Medicare supplement plans pay the 20% that Original Medicare doesn’t pay. Any healthcare costs not on Medicare’s approved list won’t be paid for by a supplement plan. Some of those items include:
- Long-term care
- Vision services
- Dental services
- Hearing aids
- Prescription drugs
- Private duty nursing
If you want coverage for those services, you’ll need to buy separate policies.
Buying a Medicare Supplement policy is an important decision and most people will benefit from someone who understands supplements and knows what’s available in your area. Find a good supplement representative who can guide you to the best plan for you and what you need.