In recent years you may have come across the term ‘Medigap,’ which is a Medicare supplement insurance that serves the purpose of filling the gaps in the original Medicare plan. Private insurance companies sell these insurance policies, and the goal is to support or supplement your original Medicare benefits.

Medicare is a health program backed by the state and administered by the Social Security Administration. Any person who goes to work usually pays Medicare taxes so that he can get Medicare benefits in old age. Medicare provides health insurance to senior adults at or above 65 years, younger individuals with any disability, and people with ALS (Arterial Lateral Sclerosis), or ESRD (End-Stage Renal Disease).

What is the Purpose of the Medicare Supplement Insurance Plan?

Most people might not know, but Medicare is not free, and it also does not cover all your health care costs. It will pay for some but not all your medical bills. On the other hand, Medigap is developed to help you pay the expense that Medicare does not cover, which includes

  • Copays
  • Coinsurance
  • Deductibles
  • Out of pocket cost

Medicare is made up of Part A and Part B. where

  • Part A covers hospital insurance that involves inpatient hospital stays
  • Part B covers medical insurance that involves outpatient medical services such as visits to the doctor

If you have an inpatient hospital stay, then Medicare Part A will cover the expense, but you will still have some out-of-pocket costs to pay. Medicare Part A has an inpatient hospital deductible of $1484, which is per 60 day benefit period. The deductible is no annual deductible, and it will reset after 60 days. In short, if you stay in the hospital, you first have to pay the $1484 before Medicare Part A comes in, and then it will cover the expense for the next 60 days you are in the hospital.

If you stay more than 60 days, you have to pay $371 a day, and if the stay is longer than 100 days, you have to pay $742 a day.

Medical Part B is the medical outpatient and doctor coverage, but this is also where you will make huge out-of-pocket payments. Medicare Part B has a deductible equal to $203 per year. You first have to pay the $203 for any outpatient medical expenses, and after that, Medicare comes in but only covers 80%, and you have to pay the rest 20%. The key thing to notice is that you have to pay the full 20%, including doctor office visits, ambulance service, chemotherapy, and MRI and CT scans.

The Medigap is more valuable when you have to cover the huge out-of-pocket costs. The Original Medicare will pay first, and then the Medigap plan will pay second and cover the remaining expenses. Medicare remains your primary insurance, but with the Medigap in place, you can go to any Medicare provider for your health concerns.

Best Medicare supplement insurance plans can help you pay

  • Part A deductible
  • Part B deductible
  • The 20% coinsurance
  • All the other out of pocket costs

However, Medicare plans are individual plans and cover one person per policy, and the plans are standardized, but the price of policies varies from one place to another. The Medicare supplement plan will cover all the medically necessary expenses, and it does not include ‘foreign travel.’ There is a valuable ‘Medicare & You’ handbook that provides all the necessary information you need to know about the services that Medicare covers.

The Medicare supplement plan is ‘guaranteed renewable,’ meaning the plan cannot cancel out or expire if you forget to pay one month’s premium.

There is a specific procedure to get the benefits of Medigap. The best Medicare supplemental insurance providers guide you on the complete process. First, you need to enroll for Medicare Part A and Part B to be eligible for the Medicare supplement plan.

Seniors who are 65 are allowed to Sign up for Medicare Part A, and if you are still working, you need to contact Social Security Administration to get enrolled in Part B. After getting enrolled in Part B for the first 6 months, you can avail Medicare supplement plan without worrying about any terms you need to qualify for. This is called a ‘Guaranteed Issue,’ and most insurance providers will accept your application.

How to Enroll for Medigap?

The Medicare Supplement Plan has a one-time enrollment option after you turn 65 and have enrolled for Medicare Part A and B. You will surely want to avail of the one-time enrollment period to take advantage of the ‘guaranteed issue, and there is no hassle to qualify for the coverage.

One of the critical things to consider is the cost of the Medigap policy as it varies from present-day to future and from one state to another. You can do a quick online search to determine the cost, which is usually lower for rural towns and more for developed urban cities. Also, you need to know that the premium depends not only on the area you live in but also on the plan you choose.

According to the plan, there are certain costs that you will have to pay, such as Copays or coinsurance, and deductible before Medicare comes in to cover the medical expense.

There are 10 Medicare Supplement Plans categorized according to alphabets such as Plan A, B, C, D, F, G, K. L, M, and N. All the plans are presented in a chart that makes it easier to know what particular plan offers. The insured individuals have to pay the monthly premiums for the Medigap policy they enroll in with the insurance provider. These plans are widely offered and offer the best value for the cost.

When it comes to best Medicare Supplement Plans, Plan F, G, and N are the most popular with the highest enrollment. More than 50% of people enroll in Plan F, while almost 9% enroll in Plan G and 8% in Plan N.

Many individuals think that Medicare Plan C, also known as the Medicare Advantage plan and Medigap Plan C, are both the same, but there is a difference between the two. The Medicare Advantage plan usually provides

  • Part A and Part B deductible coverage
  • Coinsurance payments to the hospital
  • Any hospital costs after a year and when the Part A and Part B coverage has reached the limit
  • Copays and coinsurance for Part B

While picking out an insurance provider, you need to consider monthly premium and other aspects such as

  • An estimate on your out of pocket costs
  • How high can the premiums go
  • What is a long term health condition

The reasons you need to choose Medicare Supplement Plan are

  • The coverage is nationwide
  • Costs are known and do not vary that much
  • You do not need any referral
  • The plans are guaranteed renewable, so not paying premiums will not cancel the plan
  • Most of the plans are standard throughout the country, so the costs are predictable

If unfortunately, a senior individual has more than one chronic ailment, then Medigap policy is by far the best and most manageable option. One can easily choose a less expensive plan according to his budget. While making a decision, you need to evaluate your current health condition and keep in mind any family history of chronic ailments.

Bottom Line

Fulmer Insurance Group can help by offering the best insurance plans. Our experts will help you determine the monthly cost and how much you need to pay out of pocket. We can provide you with the Medicare Supplement Plan, compare the plans, and see the best fit. The Medicare plans are standardized, making it easy to analyze them, but you need professional advice that we can provide you.