For individuals new to Medicare, it’s important to be aware that the program does not cover everything. Below we will cover the most important facts you need to be aware of when seeking to gain supplemental insurance. These plans are otherwise known as Medigap plans.
What used to be called the donut hole in the Medicare program is now termed Medigap. Policies can be purchased that will fill components lacking in the traditional Medicare program. As with much healthcare, Medigap plans can contain conditions that affect when and what you can purchase.
Basics of Supplemental Plans
Medigap plans have the same letter designation regardless of the company but can vary in price significantly. Just like when shopping for a car, calling numerous insurers can make a huge difference. You can often get identical coverage for a much lower price. For example, when buying Plan F, one of the most popular options, a 65-year-old man can pay anywhere from $1,000 to $6,500 for the same coverage.
Individuals that are young and healthy will find more options than those that are older or have preexisting conditions. It becomes especially difficult to find an insurer when over the age of 70. Websites such as NAIC.org and Shiptacenter.org contain direct links to insurance companies in your state. These can assist you with your Medigap Plan options. Allsup Medicare Advisor can also provide recommendations based on needs.
Ten Available Plans
There are currently ten plans to choose from when looking for Medigap coverage. The good news is, is that they are standardized. This means that no matter where you live you will have the same choices. You will find the difference lies in the cost. Insurers in the state you live in will often have a different premium for the same plan from an insurer in another state. In addition, insurers in the same state can offer better prices for the same coverage. It pays to shop around.
Money Saving Tips
There are a few ways you can save money on a Medigap plan. First, if both you and your spouse choose the same plan a discount is often applied. This is a good question to ask your insurance representative. Another way you could potentially save money is to think of using a smaller company. We are all aware of the big name insurers, but it’s often the smaller companies that can offer better premiums with the same coverage.
You wouldn’t normally think of a high deductible as saving you money. However, the premiums are considerably lower. Based on your use and needs a high deductible can actually save you money. Be sure to do the math before choosing a plan.
Compare By State
If you happen to be a “snowbird”, then certainly compare rates in both of the states you reside in. You may reap a considerable savings. As a rule, you should purchase your Medigap policy in the state that you have on file with Social Security.
Don’t forget your free physical. Every year, you are entitled to one physical at no cost to you. In addition, some preventive services are free. Some vaccines and various screenings cost nothing and can save expensive procedures in the future.
Normally, when purchasing any medical policy, medical underwriting is required. There are some exceptions, however. If you’re switching from the high priced Plan F to a lower priced Plan F, new underwriting will not be necessary. This will make it easier to switch. That can make a huge financial difference depending on the plan selected.
Example of Switching Plans
For example, if a 65-year old man has secured a low deductible policy it can cost around $2,300. When switching to a high deductible plan, however, it can cost less than $700. Although it sounds great, it’s important to remember that with a high deductible policy the individual will have to pay over $2,100 out-of-pocket before any benefits kick in. This is extremely important since the older a person gets the harder it is to switch plans.
Another thing to keep in mind is that Plan F is only one choice. Another option is Plan N that requires individuals to pay $166 for the Medicare Part B deductible annually, a $20 co-pay for each doctor’s visit and $50 for each emergency room visit. Keeping in mind whether the reduction in premiums is worth the extra cost over the long-run will ensure the best policy and insurer has been selected.
Checking your state for any special requirements when considering changing policies can make the move to a new plan effortless. Many states even have buyers’ guides that help individuals navigate the system. Some states only allow changes on the anniversary of the renewal date, while others use an individual’s birth date as the basis for decisions. Knowing the rules, what plans insurers offer and the monthly premium in advance will ensure the right decision is made the first time.
Other Eligibility Requirements
Of most concern to many people trying to find the right Medigap Plan is the presence of preexisting conditions. That’s because insurance companies are allowed to deny coverage for up to six months after an application has been received. It’s important to note, however, that insurance companies can only require a waiting period if the condition was treated within six months prior to the time the application was made. If not, no waiting period can be applied.
Another thing to keep in mind is that if a Medigap Plan was purchased prior to 1990, you cannot be dropped except if you lied on the application or the company goes into bankruptcy. Regardless of the reason, an individual does have the right to purchase another plan.
Find an Insurance Representative
The best advice of all is to find an insurance representative. Someone who is knowledgeable about Medigap polices to help you clear up any confusion. They can certainly point out to you the best value for your needs.
Know Your Rights
When finding a supplement for Medicare Insurance, the most important thing is to know your rights under the Federal Law. You have the right to purchase Medigap coverage and you have protections if you lose or drop your coverage. The best advice is to shop around so you can get coverage that fulfills personal needs yet is affordable.
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