All insurance companies selling a particular Medicare Supplement plan type in your area must offer the same basic benefits, but may offer it at different prices. So, you may want to shop for the best price.
Medicare Supplement Plans
Medicare Supplement Plans (MS), also referred to as Medigap insurance, are private health insurance policies that help cover expenses not paid for by Original Medicare, also called Part A and B. These expenses can include copayments, deductibles, and coinsurance. Some plans even help cover medical costs incurred during travel to other countries. If you’re one of the 60% of seniors who say traveling is their number one most important retirement goal, buying a Medigap plan is one way to help you stay covered while away from home. Part A and B doesn’t cover many expenses—leaving some people with high out-of-pocket costs. For example, Part B generally covers 80% of medically necessary services, and there is no out-of-pocket limit, meaning costs can add up. Medigap helps cover the 20% of leftover costs. Still, it doesn’t cover everything. In general, services like vision and dental care, hearing aids, long-term care, and private nursing are not covered. If you’re looking to get coverage that includes some of these extra benefits, you may want to consider an Advantage (MA) plan. You cannot have both a MS plan and an MA plan, as Medigap is designed to help offset some of the costs of Part A and B—not Part C. If you have an Advantage plan, you may be able to apply for a Supplement plan, but you must be sure to leave the Advantage plan and move back to Part A and B before the policy goes into effect. Keep reading to learn more about supplement plans—and decide if they’re right for you.
The ABCs: You have an alphabet of plan options.
The 10 different plans are named using a letter of the alphabet: A, B, C, D, F, G, K, L, M, and N. Each plan includes a unique set of benefits, which are standardized by law.* Because private insurance companies offer supplemental insurance, the options available to you depend both on your state’s laws and on what each insurance company is willing to offer. All companies that offer Medigap plans must offer Plan A. Also, Plans C and F must be offered if a company provides any plans besides Plan A. Because these plans are standardized, you can focus on which set of benefits is right for you and compare costs to decide which company to go with. *Massachusetts, Minnesota, and Wisconsin standardize plans differently than the rest of the country. If you live in one of these states, contact one of our licensed sales agents who can help you understand your options. You may also contact your local state insurance department.
How insurance companies set Medigap premiums There are three ways an insurance company can set Medigap premium rates:
"Community-rated" (or "no-age-rated") premiums are the same for everyone, regardless of age.
"Issue-age-rated" (or "entry-age-rated") premiums are based on your age when you first buy the policy. The sooner you enroll, the less you will pay.
"Attained-age-rated" premiums are based on your current age, meaning it goes up as you grow older.
Other factors impacting the premium rates can include inflation, geography, medical underwriting (if you did not enroll when first eligible), and other discounts. You should check with each specific health insurer to see how it sets Medigap prices before you buy. *Pre-existing conditions are generally health conditions that existed before the start of a policy. They may limit coverage, be excluded from coverage, or even prevent you from being approved for a policy; however, the exact definition and relevant limitations or exclusions of coverage will vary with each plan, so check a specific plan's official plan documents to understand how that plan handles pre-existing conditions.
Be aware that Medicare Supplement plans supplement Original Medicare to fill in cost gaps. If you are considering a Medicare Advantage plan, you can’t use a Medicare Supplement plan in conjunction with a Medicare Advantage plan.