What is a Medigap Policy?

A Medigap Policy is another term for Medicare Supplement Insurance. These policies are private health insurance designed to “supplement” or cover the “gaps” that Original Medicare doesn’t cover, such as copayments, coinsurance and deductibles.

Medigap Policies sold after January 1, 2006 are not allowed to include prescription drug coverage. If you do not have prescription drug coverage from a previous employer or your service in the military, you can purchase it from a private insurance company approved by Medicare.

To avoid medical underwriting (being asked health questions) purchase your Medicare Supplement within six months of enrolling in Part B. If you or your spouse continue to work after 65 you can compare your current employer premium and benefits with the cost of buying your own plan and decide which is best for you.

The CMS (Centers for Medicare & Medicaid Services) publishes guides like Medicare and You and Choosing a Medicare Medigap, that provide a chart detailing the benefits of the 10 different Medigap plans (identified by letters A through N). Since these plans are “standardized”, the benefits are the same no matter which insurance company you choose.

5 Questions you should ask Before Purchasing a Medigap Medicare Supliments consultant Raleigh(Medicare Supplement Insurance) Policy

The first step in purchasing a Medigap Policy is to review a government published guide, such as Choosing a Medigap Policy, and decide which of the standardized plans fits your lifestyle, budget and medical needs. At no additional cost to you a health insurance broker with a Medicare Supplement license can help you find a plan.

If you want a policy that covers all the “gaps” that original Medicare does not cover choose Plan F. However, if you are turning 65 after January 1, 2020 this plan is not available to you.  For beneficiaries turning 65 in 2020 or later the most benefit rich plans are Plan G, which has an annual deductible for Part B of $203.  The least expensive Medicare Supplements are High Deductible G’s, which have annual deductibles of $2,370 deductible on Part A and $203 on Part B. There are also plans in the middle that don’t cover all the deductibles or require you pay part of the cost of your doctor or hospital visits.

Since these plans are standardized, it would seem that you should simply choose the insurance company with the lowest premium. However, the company with initially the lowest premium may not be your best deal. Here are the questions you should ask before you buy:

1. How long will my premium be held firm?
Some companies hold your premium firm for a year, but after that you may have increases more than once per year. Others have rate changes once a year at a time that is independent of the policy holder’s start date.

2. Are discounts available to me?
Many insurance companies offer discounts if you have a spouse or have lived with someone at least 1 year.  There are a number of different requirements for these discounts. Some insurance companies will provide discounts even if your spouse or household member does not purchase a policy from their company. The age requirements of the household member varies. It can be as low as 18 and as high as 60.

3. Can I change to a different plan without underwriting (a medical evaluation)?
Most companies require you go through medical underwriting to change to a different plan. However, there are exceptions to this.

4. How are the prices set for this policy?
This is important since it affects how much you will pay now and in the future. Medicare Supplement (Medigap policies) are priced these 3 ways:

  • Community rated- Even though your premium may increase due to inflation or other factors, it will not be due to your age. The “community” could be the state of North Carolina and an increase could stem from North Carolina issues affecting medical costs.
  • Issue age (also known as “Entry Age”) – Premiums are lower for those who buy at a younger age and won’t change automatically as you get older. However, they can increase for other reasons such as an increase in claims or higher medical costs.
  • Attained age – Premiums are lower for younger buyers but rise as they get older. Some companies increase the rates automatically once per year or more. Other have no increases or very small ones each year, but increase premiums every 5 years.

5. Do you have a program like Silver Sneakers where I will get a free or discounted gym membership?  If you enjoy physical activity this could help you improve or maintain your health without impacting your budget.

Read about Medicare Advantage Plans Here.

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