Medicare Supplements: Your Essential Guide to Medigap in Minnesota
Figuring out what to do with your Medicare health insurance can be challenging, especially when you know the future is full of unexpected events. Life experience often teaches us the adage “you get what you pay for” and with Medicare, you may have heard the same thing.
That’s where Medicare Supplement Insurance, or Medigap, comes into play. Designed to cover the out-of-pocket costs that Original Medicare (Part A and Part B) doesn’t, Medigap provides peace of mind by helping to manage these additional expenses.
Whether you’re new to Medicare or exploring your options, understanding Medigap is crucial for making informed decisions about your Medicare health insurance options.
Table of Contents
Introduction: Getting Started with Medigap
Medigap is insurance you can purchase to cover costs such as copayments, coinsurance, and deductibles that Original Medicare doesn’t fully cover.
To buy a Medigap policy, you must have both Medicare Part A (Hospital Insurance) and Part B (Medical Insurance). Importantly, Medigap policies only cover one person, meaning that if both you and your spouse want coverage, you each need to buy separate policies. This also means that if one spouse is on one type of Medigap plan the other spouse can be on another type, or even on an Advantage plan.
Your journey with Medigap begins with the Medigap Open Enrollment Period, which starts the 3 months before you have Medicare Part B and are 65 or older and extends for 6 months after your birth month. This seven-month window is critical because during this period, you can enroll in any Medigap policy without any possibility of being denied coverage due to pre-existing conditions because this window allows you something that is called a “guaranteed issue right” meaning you cannot be penalized for your health history. Miss this window, and you might face higher costs or limited options.
Putting together the puzzle of Medigap Coverage
Medigap plans are standardized, meaning each plan with the same letter offers identical benefits. Most states have ten types of Medigap plans, labeled A-D, F, G, and K-N, each offering a different set of benefits. Minnesota and a couple other states have a different canon of Medigap plans, but they are still standardized. The key difference between Supplement plans (with the same standardized coverage) from different companies is the premium cost.
Medigap helps cover your share of costs for services covered by Original Medicare. These include copayments, coinsurance, and deductibles. Some Medigap policies also cover services that Original Medicare doesn’t, such as emergency medical care during foreign travel.
However, Medigap doesn’t cover everything. It generally does not cover long-term care (such as non-skilled care you get in a nursing home), vision or dental care, hearing aids, eyeglasses, or private-duty nursing. For prescription drug coverage, you’ll need to enroll in a separate Medicare drug plan (Part D), as Medigap plans sold after 2005 do not include prescription drug coverage.
How Medigap Works
When you receive care, Medicare first pays its share of the Medicare-approved amount for covered health care costs. Then, your Medigap policy pays its share. In many cases, the Medigap insurance company receives your Part B claim information directly from Medicare, simplifying the process. If this isn’t the case, ensure your doctor “accepts assignment” for all Medicare patients, allowing your Medigap insurer to pay them directly.
Only around 1-2% of doctors don’t accept assignment (the standard payment that Medicare pays doctors for a particular procedure) but some Medicare Supplement policies will pay the doctor’s excess fees.
Once you purchase a Medigap policy, it renews automatically each year as long as you continue paying the premiums. Your insurer can only cancel your policy under specific circumstances, such as non-payment of premiums, untruthful information on the application, or if the company goes out of business.
Since insurers can cancel your Supplement plan for non-payment of premium (and you might not be able to get back on the plan) I don’t recommend setting the payment up on a credit card, even if the sky miles are helpful.
It’s essential to understand that Medigap is different from Medicare Advantage Plans (Part C). While Medigap supplements Original Medicare, Advantage Plans provide an alternative way to receive Medicare benefits. You can’t have both a Medigap policy and a Medicare Advantage Plan simultaneously. If you decide to switch from a Medicare Advantage Plan to Original Medicare, you can then buy a Medigap policy, but it’s crucial to understand the terms and timing to avoid lapses in coverage.
Medigap Costs: What to Expect
Medigap premiums vary based on several factors, including the insurance company, the plan type, and your location. While the benefits of each plan letter are standardized, the premiums are not, so it’s important to compare prices. For example, Plan G from one company will offer the same benefits as Plan G from another, but the premium costs can differ significantly.
In many states the cost of your Medigap policy may also be influenced by:
Discounts for women, non-smokers, or married
Payment methods, such as yearly payments or electronic funds transfers
Use of medical underwriting or different premium rates if you’re outside your Medigap Open Enrollment Period
But in Minnesota we have something called community rating, meaning you pay the same premium as everyone else on your plan with the exception of smokers who will usually have an increase in their monthly premium. When you buy a Medigap policy, you’ll pay a monthly premium to the insurance company in addition to your Medicare Part B premium. Expect premium amounts to increase annually, usually around 6% but this will vary by plan and company.
Conclusion
Summary
Medigap plays a crucial role in managing healthcare costs and providing additional coverage beyond Original Medicare. By understanding the basics, coverage options, operational aspects, and costs associated with Medigap, you can make informed decisions that best suit your healthcare needs.
Remember, thorough comparison and understanding your individual requirements are key to selecting the right Medigap policy for you.
