Best 10 Things to Know About Medigap Plans

  1. Medigap Plans and Original Medicare Enrollees:
    Private insurance companies offer Medigap plans, regulated by both states and the federal government, exclusively for original Medicare enrollees. These plans cover the 20 percent of healthcare costs that Medicare does not, including additional medical expenses. In contrast, Medicare Advantage plans do not permit supplemental insurance, despite having various out-of-pocket costs.
  2. Diverse Supplemental Insurance Options:
    Medigap is not the sole supplemental insurance choice. Eligibility for policies from past or present employers and Medicaid coverage can also address most out-of-pocket medical expenses. Approximately 36 percent of original Medicare enrollees opt for private Medigap plans.
  3. Varied Medigap Options:
    With eight to ten Medigap options available, the federal government determines coverage for these plans, except in Massachusetts, Minnesota, and Wisconsin. The standardized plans, labeled A through N, ensure consistent basic benefits across insurers and locations.
  4. Availability Restrictions on Certain Plans:
    As of 2020, Congress restricted the sale of Medigap plans C, F, and high-deductible F to individuals newly eligible for Medicare. However, those eligible before January 1, 2020, can still access these plans.
  5. Private Insurance Company Sales:
    Medigap policies are sold by private insurance companies, offering multiple plans with the same letter but varying prices. The cost can significantly differ, providing beneficiaries with diverse choices.
  6. Optimal Time to Purchase a Medigap Plan:
    The ideal time to purchase a Medigap plan is typically during the six months following initial enrollment in Medicare Part B. During this period, insurers cannot deny coverage or charge higher premiums based on preexisting health conditions.
  7. State-Specific Enrollment Rules:
    Some states, such as Connecticut and New York, allow Medicare beneficiaries to purchase a Medigap plan at any time without denial. Other states have designated times for plan switching.
  8. Price Discrepancies Among Plans:
    Medigap plans come with varying prices. For example, the cost for a 65-year-old nonsmoking individual can differ significantly based on the chosen plan and location.
  9. Consider Coverage Needs Over Price:
    While prices differ, it’s crucial to shop for Medigap plans based on coverage needs rather than price alone. Lower-cost policies may be suitable for healthy individuals, but unforeseen health issues can result in substantial personal costs.
  10. Unbiased Assistance Available:
    Beneficiaries can seek unbiased help from the State Health Insurance Assistance Program (SHIP) for personalized guidance in choosing a Medigap plan. Starting early is recommended, especially with increased demand toward the end of Medicare open enrollment.

Expert Recommendations:
A group of experts, including Bonnie Burns, Tricia Neuman, and Ray Walker, provided advice on Medigap plans. Plans offering comprehensive coverage (C, F, G) or good coverage for less money (D, N) were highlighted, along with sensible options for those with chronic health conditions (C, D, F, G, N) and plans for saving costs with certain conditions (High-deductible F or G; K, L). Additionally, plans suitable for those not expecting hospital visits (A, B) and plans with limitations for hospital coverage (A, K, L, M) were discussed. Understanding these recommendations can assist Medicare enrollees in making informed choices about their supplemental insurance.

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