How medicare supplemental insurance works
Medicare is the basic health plan Americans over 65 (and some younger) rely on for the bulk of their health care needs. However, this care is limited, and Medicare supplemental insurance is a means of extending coverage and reducing out-of-pocket expenses.
Medicare supplemental insurance comes in 10 standardized Medigap plans. The plans are referred to by letter (A-J) and vary in price and coverage. Plan J has the most coverage, and Plan A the least.
Each plan is standardized. This system makes it very easy to compare polcies, because every plan must carry the same coverage, no matter who is selling it. Plan A from one insurer offers identical coverage to Plan A from another insurer, plan B from one is equal to B from another, and so forth. Not every plan is offered in every state.
Why Medicare supplemental insurance is so important
Medicare provides older Americans with a lot of health care security. But benefits are limited. Medicare doesn't cover prescription drugs and preventative medecine, and many medical expenses, like hospital stays and skilled care carry large deductibles. (For example, in the event of hospitalization, you must pay over $800 before Medicare pays anything.)
Just one serious illness (or even one large annual prescription drug bill) can take a dramatic financial toll, even with Medicare coverage.
That's where Medicare supplemental insurance comes in. The various Medicare suplements provide coverage for the following:
• 365 extra days of hospital care
• 3 pints of blood.
• The Medicare deductible.
• The Medicare coinsurance or copayment
• Costs above the Medicare maximum annual payout
• Perscription Drugs
• Foreign Travel Emergency
• At-Home Recovery
• Skilled Nursing Coinsurance
• Preventative Care
Not every Medicare supplemental insurance plan covers each of these benefits. (Most don't.) The first three benefits are the "core benefits" found on every plan. The rest are add-ons, and with each increase in coverage comes an increase in cost.
Confused yet? It can help to see everything in a nice format, so we've put together a Medicare insurance chart that lists exactly which benefits each plan covers. Or keep reading for very important eligibility information.
Are you eligible for Medicare supplemental insurance?
Perhaps the most important thing to learn about Medicare supplemental insurance is how the eligibility works.
You can only buy Medicare suplemental insurance if you are enrolled in Medicare Plan B and you are at least 65 years old or are disabled. Once you meet both of these requirements, you have a six month open enrollment period to purchase the policy.
During this time health insurance companies cannot deny you coverage, cannot charge you higher premiums because of health issues, and caanot impose excessive exclusion periods.
After your inital enrollment period is over, you can still apply for coverage during one of the annual open enrollmeants, but you made be denied coverage or charged higher premiums.
It is very important to apply for medicare supplematal insurance during your enrollment period if you want to guarantee yourself affordable coverage later on. This is especially If your family has a history of health problems or if you need a lot of high-costing perscription drugs.
Medicare supplemental insurance quotes and info
Buying medicare supplemental insurance is an important process, and should be undertaken carefully. You want to be sure you're getting enough benefits while keeping premiums affordable.
While it's a good idea to evaluate your options before you shop, stay flexible. Not all plans are available everywhere (the most valuable plans can be hard to find), and even when they are available, you may find them priced out of your range.
Medigap Comparison: Compare Medicare Supplements
The chart on this page allows you to compare Medicare supplements at a glance. This chart will be easier to use if you already have an idea about which medigap insurance benefits you require.
Keep in mind that some plans aren't available in all states, and many of the Medigap insurance benefits offer only partial coverage. (Prescription drug benefits for example, only cover half of your costs, and then only after a deductible is met).
Explanation of Medigap insurance benefits
Medicare A & B coinsurance. This Medigap insurance benefit covers the coinsurance cost incurred during a hospital stay under Medicare A and the coinsurance or copayment on Medicare B services once the deductible is met.
365 days extra hospital stay. This Medigap insurance benefit covers the full cost of 365 extra days of hospital stay after all Medicare hospital benefits are exhausted.
3 pints of blood. This Medigap insurance benefit covers the cost of 3 pints of blood per year.
Part A deductible. This Medigap insurance benefit covers the deductible on Medigap Part A, which may vary from year to year. (It is $840 in 2003.)
Foreign travel emergency. This Medigap insurance benefit covers 80% of emergency care administered outside the country during the first 60 days of any trip. A $250 deductible and $50,000 lifetime maximum apply.
Skilled nursing coinsurance. This Medigap insurance benefit covers up to $105 per day towards the cost of a stay in a skilled nursing facility during days 21 through 100.
Medicare Part B deductible. This Medigap insurance benefit covers the annual deductible on Medicare Part B, which may vary year to year. (It is $100 in 2003.)
Medicare Part B excess. This Medigap insurance benefit helps cover the additional cost of services by doctors who don't accept "assignment" (that is, who don't accept Medicare's reimbursement as payment in full). Medigap G pays for 80% of the extra cost, and Medigap F, I, and J cover all the extra cost.
At-home recovery. This Medigap insurance benefit helps cover the additional cost of at-home care if you are already receiving Medicare-covered home health care services. A $40 per day and $1,600 per year limit both apply.
Preventative care. This Medigap insurance benefit provides for up to $120 worth of preventative care per year. (Covered services include check-ups, cholesterol screening, hearing tests, diabetes screening, and thyroid testing.)
Prescription drug benefit. This Medigap insurance benefit helps cover the cost of prescription drugs. Medigap H and I cover 50% of the cost up to $1,250 per year, and Medigap J covers 50% of the cost up to $3,000 per year. A $250 deductible applies under each plan.
Compare Medicare supplements online
Buying Medigap insurance is a very important process, and you want to weigh your options. But you also want to balance coverage with affordability.
When shopping around, evaluate your options before you buy, but stay flexible. Not all plans are available everywhere, and some Medicare supplements may simply make coverage too costly. (Medigap coverage for at-home recovery, for example, is very expensive.)