If you’re anywhere near entering Medicare, you’ve surely seen a glut of advertising and commercials about the various options available. One of the most heavily advertised is Medicare Supplement Insurance. To help you gain a better understanding of what this coverage is and how it works, we wrote this short guide to Medicare Supplement plans in Louisiana.
Before we can really dive into the details of Medicare Supplement, we need to spend a minute or two discussing Medicare and how it works. You probably know that Original Medicare is split into two related programs: Part A and Part B. Part A provides hospital and other institutional coverage while Part B provides medical insurance for outpatient medical care. While this coverage is very good, many people don’t understand that Medicare doesn’t pay for all of your costs. You will incur expenses every time you use your Medicare benefits. Original Medicare was designed so that you would have to pay these costs:
Of these expenses, the most onerous are the Part A deductible, which is $1,556 for 2022, and Part B co-insurance, which is 20% of the total Medicare-approved charges for every service and procedure you receive after you’ve paid the Part B deductible ($233 for 2022). Unlike most other health insurance coverages, you can actually pay the Part A deductible more than once in a year, although this is a relatively rare occurrence. Part B co-insurance can also add up during the year, especially if you receive expensive procedures or services like chemotherapy. The worst part about these out of pocket costs is that there’s no limit to how much you pay; you simply keep paying all year long, even if you’ve paid tens of thousands of dollars already. The fact that your exposure is unknown and unpredictable is a major concern to many people, and one of the chief reasons Medicare Supplement insurance was created.
Medicare Supplement Insurance, or Medigap, as many people refer to it, is a private insurance coverage that’s designed to help you pay the out of pocket costs you’d normally be responsible for. Since the out of pocket costs can be thought of as gaps, you could say that Medigap coverage fills in the gaps of Original Medicare. Medigap plans are standardized throughout most of the U.S.; 47 states, including Louisiana, have adopted standardized Medigap Plans. In these states, there are a total of 11 Medigap Plans available, and they’re identified by letter; Plans A, B, C, D, F, G, K, L, M, and N. In addition to these nine, there are “high deductible” versions of Plan F and Plan G. Every one of these plans covers a different mixture of the costs/gaps in Medicare. Some are very comprehensive, meaning you are exposed to smaller spending, and others are less so, leaving you exposed to comparatively more out of pocket spending. You can select a plan based on the combination of coverage you desire and the cost for coverage. The plans are standardized, so it doesn't matter which state you live in (as long as it’s one of the 47 standardized states) or which insurance company you choose; the coverage will be exactly the same. When you go to the doctor or other Medicare provider, you’ll use both your Original Medicare card and your Medigap card. Your provider will bill Medicare first, as your primary insurance coverage. Assuming you’ve met your deductible, Medicare will pay the bulk of the cost; they’ll pay 80% of the cost for Part B services like doctors’ appointments. The provider will also bill your Plan the remaining balance. With most standardized Medigap plans, your plan will pay the remaining amount due. At worst, you’d have to pay 50% of the amount left, which means that you’d only end up paying 50% of the 20%, or 10% of the total Medicare-approved cost. You will continue in this way for the rest of the year. In the next year, you’ll have to meet the deductible again.
You’ve likely heard of Plan G; it is one of the most popular Medigap plans. Plan G is the most comprehensive plan available to people who become eligible for Medicare after December 31, 2019. Plan G covers 100% of the gaps in Medicare except for the Part B deductible. With Plan G, you end up paying the Part B deductible before it will pay for any of your Part B costs. However, once you’ve met this, Plan G will cover any other Medicare-approved costs for the rest of the year. This essentially limits your Medicare-approved spending to a few hundred dollars each year. Plan G also provides emergency coverage for travel outside of the United States.
To enroll in a Medicare Supplement Insurance plan, you need to be active in Part A and Part B of Original Medicare. Most people have the chance to enroll in Parts A and B when they turn 65. When this is the case, you’ll be able to choose and enroll in a Medigap plan once you have your Medicare number. The case is the same if you delay taking Part B because you’re still working when you turn 65. Whenever you retire, you’ll have the chance to activate Part B; when you do, you can also add your Medigap plan. However, some people are able to enter Medicare early, before turning 65. When this happens, it creates a little bit of ambiguity because federal law and regulations don’t require insurance companies to give Medigap coverage to people under 65 years of age. Instead, each state is able to set its own rules for people who get Medicare before age 65. In Louisiana, plans are required to offer Medigap coverage to people under 65. However, they are allowed to charge higher premiums in this case, so the coverage can be very expensive. For this reason, people who get Medicare before 65 in Louisiana may be better off using Medicare Advantage until they turn 65.
Every Medicare Supplement plan with the same plan letter (F, G, etc) offers precisely the same benefits to you, but prices vary widely from one insurer to another. It’s in your best interest to have access to as many plans by as many insurers as possible when you make your Medicare Supplement plan.
That’s where Medicare Consumer comes in. When you speak with our experts you get access to plans from dozens of different insurers. They’ll guide you to the right plan for you at the best possible rate.
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Participating sales agencies do not offer every plan available in your area. Any information we provide is limited to those plans we do offer in your area. Please contact Medicare.gov or 1–800–MEDICARE to get information on all of your options.
Participating sales agencies represent Medicare Advantage [HMO, PPO, PFFS, and PDP]organizations that are contracted with Medicare. Enrollment depends on the plan’s contract renewal.
Enrollment in the described plan type may be limited to certain times of the year unless you qualify for a special enrollment period.
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