The best time to make a plan for your Medicare coverage is in the few months before it begins, or in the month before the annual enrollment period opens. Making a plan should include both understanding how the costs of Original Medicare work, and also contemplating the various private insurance options for lowering your out of pocket spending. Medicare Supplement Insurance is one of the most-trusted tools for managing out of pocket expenses in Medicare. In this article we will explain how much your Medicare coverage could cost, and also help you understand the details of Medicare Supplement Plans in New Jersey.
Original Medicare is split into two coverages - Part A, which helps you pay for hospitalization and other inpatient care, and Part B, which helps you pay for outpatient medical care like doctor’s visits, and other services. Both of these coverages will require you to pay part of the costs out of pocket.
The costs that you’ll encounter include:
It is possible to pay the Part A deductible more than once during a year if you have multiple hospitalizations under certain conditions. You will only pay the Part B deductible once. However, once you meet the Part B deductible, you will pay 20% co-insurance for every Part B procedure or service you receive for the rest of the year.
Your costs are not capped; you keep paying your share of cost for all covered services and procedures. This is perhaps the most unpleasant aspect of Original Medicare. It is also one of the chief reasons that people consider using Medicare Supplement Insurance.
Medicare Supplement Insurance, which you’ll frequently see referred to as Medigap, is a private insurance coverage that’s designed to limit or eliminate these out of pocket costs. Medigap protects you from high medical spending when you are in Medicare. Since many people with Medicare coverage are also on fixed incomes, Medigap coverage can provide great peace of mind that you’ll be able to afford the medical care needed to live a long and healthy retirement.
Although Medicare Supplement Insurance is offered by private insurance companies, the coverage is regulated by both the federal government and the individual states. The coverage provided by Medigap plans is standardized in 47 of the U.S. states; New Jersey is one of these. In the standardized states like New Jersey, there are ten basic Medigap Plans: A, B, C, D, F, G, K, L, M, and N. Besides these, there are also High Deductible versions of Plans F and G. It’s important to note that Plans C, F, and High Deductible F are not available to anyone who becomes eligible for Medicare after December 31, 2019.
Each of the standardized Medigap Plans covers a different number and combination of the costs you’d normally pay. Since each plan has a unique coverage mix, you can easily choose the level of coverage you want, and make sure it has a premium cost you can afford.
Premiums are set by the individual insurance companies, although they are regulated by the state of New Jersey. Premiums can be set in a few different ways, but it’s useful to understand that they tend to increase each year. Once you are enrolled in a Medigap plan, your coverage is “guaranteed renewable,” which means that you can’t be dropped by your insurance company, or charged a higher premium rate based on your individual health or claims history.
With Medigap coverage, you’ll pay your providers (doctors, facilities, and durable medical equipment providers) with a combination of your Original Medicare benefits, your Medigap plan, and out of pocket spending. Whenever you receive medical services, your providers will bill Medicare first (assuming that you’ve already met the Part B deductible). Medicare will pay the first 80% of the costs. Your Medicare Supplement Plan will pay next; many of the available plans will pay all of the remaining amount due. In some cases, you might still have some amount due. In any case, your costs will be lower than you would pay without Medigap.
Medigap coverage is much different in comparison to Medicare Advantage (Part C) Plans. Medicare Supplement plans simply supplement your Original Medicare coverage; you’re still using your Part A and B benefits when you have Medigap coverage. Your plan merely helps reduce your out of pocket costs. You can see any provider that takes Medicare as an insurance coverage. You generally won’t have to deal with referrals to see specialists.
Medicare Advantage, on the other hand, is actually an alternative to Original Medicare. With Medicare Advantage, you are using your Part A and B benefits through a private health insurance plan. You’re technically not a part of the traditional Medicare program. However, Medicare Advantage plans are required by law to cover everything that Part A and B cover. With Medicare Advantage Plans, you can expect to encounter provider networks; generally you must use the plan’s network. You’re also much more likely to need referrals to see specialists.
With Medicare Advantage coverage, you’ll generally pay small co-payments for the services you use during the year. All Medicare Advantage Plans have an annual Out of Pocket Maximum (OOPM) amount; you will never spend more than this amount on medical care in any year.
You have to be actively enrolled in Part A and B of Original Medicare in order to enroll in Medicare Supplement Plans in New Jersey. You can enroll in the Medigap Plan of your choice online, by phone or fax, or with a paper application. Unlike in other states, it is easy for people who enter Medicare early (before turning 65) to enroll in Medicare Supplement Plans in New Jersey.
No. Medigap is optional.
Yes. However, depending on when you apply for new coverage, your ability to enroll may be dependent upon your health history.
No. You should consider adding a standalone dental insurance plan if you want that coverage.
No. To get help with your medications, you will need to add a Medicare Part D drug plan.
Yes. You can do this during the Medicare Annual Enrollment Period, which runs from October 15 to December 7.
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