Medicare Supplement Plans are a popular and important tool for keeping your medical costs down. Since people on Medicare tend to be at or near retirement and on fixed incomes, tools that help create predictable cash flow are valuable. This is exactly what Medicare Supplement Plans in Oregon do; they help you maximize your retirement income by lowering your out of pocket costs for health care. Read this article to learn more about the costs of Medicare, and how Medicare Supplement Plans work.
Before discussing the ins and outs of Medicare Supplement Plans, it’s important to review the basics of the Medicare program itself. There are many misconceptions about Medicare, and one of the biggest is that it covers all of your medical expenses. This is untrue; Medicare was actually created in a way that requires you to pay for some of the cost for your care.
The costs that you are responsible for are:
While all of these costs are meaningful, the Part A deductible and Part B co-insurance are the charges that can add up to uncomfortable amounts. Part B co-insurance, in particular, can grow quickly since these amounts represent 20% of the cost of Part B services. Part B services include many common cancer treatments, which are very expensive.
Your spending is potentially unlimited when you have only Original Medicare (Parts A and B) coverage. There are no out of pocket caps on your spending; you keep paying all through the year, even if you’ve already spent thousands on your care. It is because of this unknown, but potentially unlimited, liability that millions of Americans use Medicare Supplement Insurance.
Medicare Supplement Insurance is a private insurance coverage that’s been around as long as the Medicare program itself (it began in 1966). Medicare Supplement (also called Medigap) Plans are issued by private insurance companies. As the name indicates, this coverage supplements, or enhances, your Medicare coverage. Medigap pays for some of the costs that you would ordinarily be required to pay.
Medigap Plans have been standardized in 47 U.S. states, and Oregon is one of them. In Oregon (as well as the other 46 states), there are 12 standardized Medigap Plans. In all 47 states, each one of the 12 plans covers a different level of benefits. These benefit levels are indicated by Plan Letter: A, B, C, D, F, G, K, L, M, and N; there are also high deductible versions of Plan F and G.
Each plan is the same in all of the standardized states. The plans are accepted in all 50 states (even the 3 states that don’t offer the standardized plans), so the coverage is good everywhere. Since the plans are standardized, you can easily shop for and compare plans. You can find the plan with the best level of coverage for you, and then compare multiple insurance companies based on price since the benefits are exactly the same between insurance companies.
Your Original Medicare and Medigap Plan benefits work together to pay for the costs of your health care. In the case of Part B services like doctor’s visits, Medicare will pay 80% of the costs once you’ve met the small Part B deductible. Normally, you’d have to pay the remaining 20%, but when you have Medigap coverage, your provider will bill this amount to your Plan. If you have one of the more comprehensive plans, your Plan will pay this amount for you.
It’s important to know that if you choose Medicare Supplement coverage, you remain free to see any doctor or provider who accepts Medicare patients, anywhere in the country. You are not subject to network and referral requirements, so you preserve one of the chief benefits of Original Medicare.
You can get Medicare Supplement Plan coverage when you are actively enrolled in both Part A and Part B of Medicare. For most Americans, this happens when they turn 65 years old. If this applies to you, you will have a seven month enrollment window during which you can sign up for Parts A and B. (If you are taking Social Security retirement income prior to your 65th birthday, you will be automatically enrolled). During your enrollment period, you can sign up for Medicare online, by phone, or at a Social Security office. Once you have your Medicare number, you can sign up for your Medigap plan.
It is possible to delay taking Part B, though. This often happens because you work beyond age 65 and remain covered by an employer plan. When this is the case, there’s no need to also have Part B coverage. As long as your employer coverage meets certain requirements, you can safely delay Part B until you lose your employer coverage. Then, you’ll have the chance to add Part B, and a Medicare Supplement Plan.
It’s also possible to enter Medicare before turning 65 in the case of certain disability or critical illness conditions. Federal law does not require Medigap Plans to cover people under age 65; this eligibility requirement is left up to each state. Medicare Supplement Plans in Oregon are required to give coverage to people under 65 years old. Oregon also limits how much plans can charge people under 65, so Medigap is a strong option for people who get Medicare before turning 65 in Oregon.
Regardless of what age you are when you enter Medicare, you’ll be able to get your Medigap plan when you first enter Parts A and B. To actually enroll in your Plan, you will complete an application. You can apply online, by phone, or with a paper application. One of the easiest ways to find and enroll in a Medigap plan is by working with a licensed insurance agent.
No. Medigap is an optional coverage, and you can choose to pass on it.
Yes. Oregon law makes it easy to switch Medicare Supplement plans each year.
Yes. You can drop your Medigap plan and enroll in a Medicare Advantage plan during the Medicare Annual Election Period, which happens between October 15 and December 7th each year.
No. You will need to add a Part D drug plan to your Medigap coverage.
No. To get dental coverage, you should consider a separate dental insurance plan.
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