4 Tips On How to Choose a Medigap Plan
- Review all your different options
- Compare prices and company stability
- Know the best time to buy
- Be aware of upcoming changes
Original Medicare doesn’t cover everything, but there are options to consider. And that can be really confusing. One option is a Medicare Supplement Insurance Plan, also known as Medigap. These are private health insurance plans that can help pay some of the costs that Original Medicare doesn’t cover (the coverage “gaps”), such as copayments, coinsurance, and deductibles.
Some Medigap policies also offer coverage for services that Original Medicare doesn’t cover, such as medical care when you travel outside the United States.
The different types of Medigap plans offered
There are ten (10) different types of Medigap plans (identified by letters A, B, C, D, F, G, K, L, M, and N) and dozens of different companies offering them. The plans are standardized, meaning all plans of the same letter have the same basic coverage, no matter which company you go with. The only thing that is different are costs, or premiums.
All Medigap plans have certain essential benefits. One is that they are all guaranteed renewable, meaning that you will have your policy as long as you pay your premiums. Another is that you can go to any doctor or hospital who accepts Original Medicare. There is no need to worry about networks. But what you pay will vary.
How companies price their policies
Even though Medigap plans are standardized, premiums can vary greatly for the same plan. Insurance companies can use many different methods to set their prices. What you pay can depend on your age, gender, where you live, tobacco usage, and your health.
Also, all Medigap plans will go up the older you get, but some more than others. It is important that you look to companies that have a better history of price stability.
The best time to buy a Medigap plan
The best time to purchase a Medigap plan is during your Open Enrollment. This is a six (6) month period that begins when you turn 65 and are enrolled in Medicare Part B. During this period insurance companies cannot turn you down or charge you higher premiums regardless of your health. If you delay signing up for Medicare Part B because you or your spouse are still working and have group health coverage, your Open Enrollment period can be delayed as well. Once you stop working and sign up for Part B after age 65, your six (6) month Open Enrollment period begins, no matter how old you are. Insurance companies also cannot turn you down or charge you more if you qualify for a guaranteed issue right.
Common guaranteed issue rights include:
- You’re in a Medicare Advantage Plan and your plan goes away or you move out of the service area
- You have Original Medicare and an employer group health plan and that plan ends
- You joined a Medicare Advantage Plan when first eligible at 65, and within the first year you decide you want to switch to Original Medicare
- You dropped a Medigap plan to join a Medicare Advantage Plan for the first time, you’ve been in the plan for less than a year, and you want to switch back
Outside of Open Enrollment and your guaranteed issue rights, you can still buy or change Medigap plans, but you could be turned down or charged more based on your health status. Even if you have an existing Medigap plan, it’s important to review your options because you could save money with the same plan by switching to a different company.
Changes are coming to Medigap plans
Even with these things to consider, decisions on which Medigap plan to choose will become even more difficult with changes coming. In 2020, those who are just turning 65 won’t be able to buy Plan F or Plan C. These two plans have been the most popular options because they cover all of the Original Medicare costs (copayments, coinsurance, and deductibles). But the reason they are going away is because in 2015, Congress decided to eliminate these plans to reduce government spending on Medicare. The critics of Plan C and F argued that they made it too easy for people to go the doctor without thinking twice about the cost. After 2020, anyone turning 65 will have to choose a Medigap plan that requires paying the Original Medicare Part B deductible (currently $184 in 2017).
Review your options
With the changes coming in 2020, it’s important that you choose wisely now that so that you do not get locked out of a plan you want, or stuck in a plan you don’t want.
Call us now at (803) 256-2067 for a review of all your Medicare options.