If you’re worried about high out of pocket spending when you’re on Medicare, you’re not alone. This is one of the biggest concerns people have about what is otherwise very good coverage. One of the tools you can use to protect against these costs is Medicare Supplement Insurance. Read this short article to get actionable information about the cost of Medicare and how Medicare Supplement Plans in Rhode Island can help you save money on medical care.
It’s only when you understand what the cost structure of Original Medicare is that you can make an effective plan to reduce your cost exposure. Understanding these costs will also help you appreciate the benefits of Medicare Supplement Insurance.
So, what are these costs? With Medicare coverage, you will be responsible for paying:
You will pay these costs throughout the year. Unfortunately, there is no spending cap under the terms of Original Medicare, so you’re not protected from high out of pocket costs. This can be a particular problem if you have frequent or prolonged hospitalizations, or if you require treatments for cancer. Medicare Supplement Insurance was created to protect you from these scenarios.
Medicare Supplement Insurance, which can also be called Medigap, is a coverage offered by private insurance companies that works with your Part A and B (Original Medicare) benefits. Medigap Plans are designed to pay for many of the costs that you’d typically have to pay out of pocket. By using Medicare Supplement Insurance, you can protect yourself from high out of pocket spending, potentially limiting your spending to a few hundred dollars per year.
When you use Medicare Supplement Insurance, you will pay for any services you receive with both your Original Medicare card and your Medigap Plan card. Your doctor or other provider will bill Medicare first, assuming that you’ve already met your deductible. Medicare will pay 80% of the cost for Part B services. Your provider also bills your plan; your plan will pay some, or all, of the remaining 20%.
One of the key advantages to using Medicare Supplement Insurance is that you’re not required to use a network of providers. You also don’t have to get referrals in order to see specialists. You are able to see any provider or facility in the country that accepts Medicare as a payment.
Medicare Supplement Plans are standardized in most of the country. In 47 states, including Rhode Island, there are 12 standardized Medigap Plans. These plans are known by plan name: Plans A, B, C, D, F, G, K, L, M, and N. In addition to these, there are also high deductible versions of Plans F and G.
Each one of these standardized plans offers a different benefit level. The benefits provided by a Medigap Plan refers to the number of and amount of costs the plan covers for you. Since the plans are standardized, the benefits for each of the options are the same, even between different insurance companies. This feature allows you to easily compare plans on a cost basis.
While there may be 12 total options for Medigap coverage, Plans F, G,and N are the three most popular plans throughout the country.
Plan F, which is only available to people who became eligible for Medicare before January 1, 2020 covers 100% of all the costs for Medicare. You will have no out of pocket expenses for Medicare covered services and procedures.
Plan G is only slightly less comprehensive than Plan F. With Plan G, you must pay the Part B deductible each year. Once you’ve paid that small amount, Plan G will cover all the rest of your costs for the remainder of the year. This is the most comprehensive plan currently available to all Medicare beneficiaries.
Plan N is also very comprehensive. Plan N leaves only two costs uncovered:
One unique feature of Plan N is that after you meet the Part B deductible, you will pay a $20 co-payment for office visits, and a $50 co-payment for emergency room visits.
As you would expect, Plan F is the most expensive of the Medigap plans, followed by Plan G. Plan N is less expensive than both.
If you enter Medicare at age 65 or older (which would happen if you delayed taking Medicare because you were still working), you can enroll in a Medigap plan when you enter Part A and Part B. You will have an enrollment period during which you can enroll.
Things are more complicated for people who enter Medicare before turning 65 (usually because of disability or illness). Federal laws don’t require Medigap plans to cover people who are younger than 65. This is an optional provision that is set at the state level. Medicare Supplement Plans in Rhode Island are not required to provide coverage to those under 65. Some of them voluntarily do so, but the prices can be considerably higher than for those age 65 and older.
When you meet the eligibility requirements, you can enroll in your Medigap plan over the phone, online, or with a paper application. By working with a licensed insurance agent, you can get help finding and comparing Medigap plans. An agent can help you pick the coverage you need and help you enroll in the plan you choose.
This is an enrollment window that lasts for six months. It starts only when you're 65 or older and also active in Part B. During this window, your coverage is guaranteed in any Medigap plan you apply for.
You can in some circumstances. If you apply for new Medigap coverage once your Open Enrollment Period has ended you might be declined or charged higher premiums based on your health. If your health is fine, you can switch plans without difficulty.
Yes. You can drop your Medigap plan (you can’t have both coverages at the same time) and enroll in a Medicare Advantage plan during the Annual Enrollment Period. This enrollment period is open from October 15th to December 7th.
No. To get help with this, you’ll need to get a standalone Part D drug plan.
No. Consider adding separate dental, vision, and/or hearing coverage for those services.
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