If you’re looking for a simple, proven way to protect yourself from large medical expenses when you have Medicare, consider Medicare Supplement Insurance. This coverage should be considered as part of any sound plan to maximize the value of your Medicare benefits. Read the rest of this article to gain a better understanding of the costs and risks associated with basic Medicare coverage, and to learn more about how Medicare Supplement Plans in Washington D.C. work.
Parts A and B of Original Medicare provide very good and thorough coverage for an affordable price. Medicare was designed to help people in retirement maintain a high quality of life through affordable, comprehensive health care. The program has accomplished these goals. While that’s cause for celebration, there are more troublesome aspects to the program. From its inception in 1966, Medicare has always required that you pay for some of the costs associated with your care. These costs are split into two types: deductibles and co-payments that change each year to reflect the rising cost of healthcare, and co-insurance amounts that are a fixed percentage.
For Part A, which provides protection against the cost of hospitalization, hospice care, and skilled nursing facility stays, you can expect to face these costs:
The deductible changes each year, so it rises with the cost of healthcare inflation. For 2023, the Part A deductible is $1,600. The co-payments also change each year.
Part B, which covers outpatient care, comes the following costs:
The Part B deductible changes each year; it is $226 for 2023. Excess charges are a fixed 15% of the Medicare-approved costs. Standard Part B co-insurance is a fixed 20% of Medicare-approved charges.
With Part B, the biggest cost you’ll face is the standard co-insurance of 20%. These amounts are usually fairly small for routine care like doctor’s visits, but can grow expensive for higher-ticket items like outpatient surgeries and cancer treatments.
The key thing to remember is that you don’t have any protection against spending with Original Medicare only, there are no limits. You’ll pay all year long. In order to protect themselves against the potential for high medical bills, many people choose to enroll in a Medicare Supplement Plan.
These plans, which you’ll also find called Medigap plans, are sold by private insurance companies. They don’t modify your Medicare coverage in any way. They are purely a secondary coverage. Medigap is designed to pay for many of the costs for Medicare that we discussed earlier. Medigap steps in to pay what you would normally be responsible for.
Medicare Supplement Plans were created and are regulated through a framework of standardized laws. 47 states, plus Washington D.C. have a uniform set of Medigap plans. In these states there are 12 standard Medigap plans available: Plans A through N, plus high deductible versions of Plans F and G. Note that Plans E, H, I, and J ceased to be available to new enrollees after 2010. In addition to this, 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 options provides a specific, and unique, level of coverage of the costs for Medicare. They are standardized in the sense that any particular Medigap Plan, say Plan L, provides the same benefits in every one of the standardized states. In other words, the coverages are uniform, no matter which of the 47 states, plus Washington, DC, you live in. This feature makes it extremely easy to shop for and compare plans. You simply pick the level of coverage you want by selecting one of the Plans A through N, then you can compare prices from the insurance companies in your area. Since the benefits are exactly the same regardless of insurance company, you can quickly compare on price alone.
No matter which standardized Plan or insurance company to select, your coverage will work the same. Assuming that you’ve met any required deductible for the year, you’ll provide both your Original Medicare card and your Medigap Plan card to your providers. They will bill Medicare as your primary insurance coverage. Medicare will pay according to the rules of Medicare; for Part B, they pay 80% of the cost. Your Medicare Supplement Plan is billed the other 20%. Your plan will pay according to the level of benefits you selected. If there is any unpaid amount, you are responsible for it.
Using Medicare Supplement Insurance doesn’t affect your existing Medicare coverage in any way (other than lowering your out of pocket costs). You can still see any doctor in the nation that takes Medicare patients. You also won’t need to get referrals to see specialists like you might have to with other kinds of insurance.
You are able to enroll in a Medigap plan when you are enrolled in both Part A and Part B. In most cases, this will happen when you turn 65 years old. When you get Medicare in this way, you get a seven month enrollment period during which to enroll. This period will begin three months before your birth month. You are allowed to enroll in Parts A and B at any time during that window. Once you have your Medicare card information, you can enroll in a Medigap Plan.
It is possible to delay taking Part B, which you might do if you decide to work past your 65th birthday and keep your employer coverage. You won’t be able to get Medigap coverage until you add Part B, which will likely be whenever your employer coverage comes to an end.
Some people get to enter Medicare before 65 because their disability or health status qualifies them to enter early. Medicare Supplement Plans in Washington D.C. are not required to cover people under 65 years old. If this coverage is available at all, it tends to be very expensive. However, anyone who enters Medicare early will have the ability to get Medigap at age 65 at the standard rates.
You should consider adding this coverage during your Medigap Open Enrollment Period (OEP). Your OEP lasts a total of six months. It begins when you are age 65 or older and also enrolled in Part B. You are guaranteed acceptance into any Medigap plan available to you during this window.
You can still apply for coverage. However, if you don’t meet the Plan’s health underwriting guidelines, you may be denied coverage or charged higher premiums.
Yes, but if you do this after your Open Enrollment Period has ended, you will be subject to health underwriting.
Yes. You can do this during the Medicare Annual Enrollment Period (AEP). AEP takes place from October 15th to December 7th of each year.
Medigap plans don’t cover prescription drugs. You can get drug coverage from a Part D drug plan.
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