Did you know that you could potentially spend thousands of dollars or more per year on health care when you have Medicare coverage? It may seem shocking, but it’s true. You are exposed to major out of pocket expenses when you have Medicare. A good way to reduce or eliminate these costs is with Medicare Supplement Insurance. In this guide, we’ll review your potential for spending under Medicare and also investigate how Medicare Supplement Plans in Virginia work.
Don’t let the prospect of out of pocket spending scare you; Medicare Parts A and B provide very good coverage for a very affordable price. In fact, probably every single medical service or procedure you’ll ever need is covered by Medicare. Besides this, Medicare will pay the vast majority of your costs for you. While that’s great to know, it’s just as important to keep in mind that you will absolutely be paying for part of these costs out of your own pocket. Medicare was designed so that you are responsible for these costs:
Before Medicare covers any portion of your medical care, you’ll have to meet a deductible. You pay the Part A deductible when you need hospitalization. The Part B deductible applies when you receive outpatient care. It’s likely that you’ll never pay the Part A deductible more than once in a year (but not impossible), and you’ll likely never have to pay daily co-payments under Part A unless you stay in the hospital for more than 60 days at a time. However, you will pay Part B co-insurance of 20% on every Part B covered service you receive all year long. When you consider that many cancer treatments are covered by Part B, you can start to get a feel for how much 20% co-insurance can add up to.
Unfortunately, there’s no limit or cap provided by Medicare to protect you from high out of pocket costs. You will always be required to pay your standard cost-sharing. Because of this fact, many people choose to add Medicare Supplement Insurance to their basic Part A and B benefits.
This coverage is provided by private insurance companies. It integrates with your existing Medicare benefits. It is designed to reduce or eliminate the costs that you’d normally have to pay. It only works with Medicare; it doesn’t give any additional health insurance benefits. Medicare remains your primary health insurance coverage.
As mentioned earlier, these plans work with your Part A and B benefits. Since they work together, you will want to make sure that you give both your Medicare card and Medicare Supplement Plan card to your providers. Once you’ve paid your deductibles, your providers will bill Medicare first as the primary payer. Your providers will bill your Medicare Supplement (Medigap) Plan second. Any unpaid amount (some Medigap plans won’t cover 100% of your cost) is your responsibility. There are several Medigap plans available that will limit your out of pocket costs to less than four or five hundred dollars per year.
Virginia is one of the standardized Medigap states. A total of 47 U.S. states have standardized Medigap plans. In these 47 states, there are ten available Medigap plans. The Plans are named by letter: A through N, although a few of these plans are not available today. The benefits are standardized, which means that they are identical within the states. So, Plan A has the same benefits in each of the 47 states; the same is true for the other plans. Each of the available plans provides a different level of coverage. To give you an idea of how the coverage levels work, let’s compare the benefits provided by two popular Medigap plans: Plan A and Plan G.
Plan A is the most basic, and least expensive Medigap Plan available. Plan A will only provide coverage for:
Plan A doesn’t help pay for any of the other expenses you’ll face, most notably the Part A deductible. Plan A also won’t cover you outside the United States.
Plan G is the most comprehensive Plan you can get if you become eligible for Medicare on or after January 1, 2020. For that reason, it is also the most expensive. Plan G covers all of the costs of Medicare for you, except for the Part B deductible. You pay this small deductible each year.After you’ve met that, Plan G pays all of your costs for you. It even provides emergency coverage while you're outside of the U.S.
In order to get Medicare Supplement coverage, you have to be enrolled in both Part A and Part B. This will happen for most people as they turn 65; this is known as ageing-in to Medicare.If you age-in, you have a seven month Initial Election Period (IEP) to enroll in Parts A and B. You can also choose to delay taking Part B if you’re still working and will remain covered by your employer’s plan. When you get your Medicare number and Part B effective date, you can enroll in your Medicare Supplement Plan.
If you enter Medicare early, before turning 65 years old, you will also have the chance to get Medigap coverage. However, since federal and state laws in Virginia don’t limit how much plans can charge people under 65, premiums tend to be very expensive. If you enter Medicare before 65, you will have the chance to get a Medigap plan at the standard prices when you eventually turn 65. In the meantime, you might want to consider a Medicare Advantage plan to get help limiting your expenses.
This is a six month enrollment window during which you can get any Medigap plan offered in your area. You can’t be turned down for coverage, or charged a higher premium based on your health.
According to federal law, you have an Open Enrollment Period for Medigap when you are both age 65 or older and also enrolled in Part B. In Virginia, you also get an Open Enrollment Period when you first enter Part B if you’re younger than 65.
Potentially. If you want to switch after your Open Enrollment Period has ended, you will likely have to answer health status questions. You can potentially be declined or charged higher rates if you don’t meet the Plan’s underwriting requirements.
Yes. This can be done during the Medicare annual enrollment window from October 15 to December 7 of each year.
No. You will need to add standalone prescription drug coverage from a Part D drug plan to get that coverage.
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