Everything You Need To Know About Medicare Supplement Policies

A Medicare Supplement policy is private health insurance that is used to supplement the Original Medicare Plan. This policy is also called “Medigap Insurance.” It is specifically designed to assist with health care costs, or “gaps,” that the Original Medicare Plan does not cover. Medicare Supplement policies often cover co-insurance, deductibles, and many other fees that Medicare doesn’t cover. If you receive benefits from the Original Medicare Plan and you purchase a supplement policy, then both plans will pay a portion of the Medicare-approved amount for covered health care costs. All of the Medicare Supplement policies are available for purchase through private insurance companies.

Keep in mind that a supplement policy is not considered a “Medicare Advantage,” because it is not meant to be a way to receive Medicare benefits. Only “standardized” Medicare Supplement policies can be sold through insurance companies. These standardized supplement policies are named by letters (A through L). A few states, such as Texas and Louisiana, allow you to buy another type of Medicare Supplement policy called Medicare SELECT.

The different types of Medicare supplement policies all offer the same basic benefits and insurance companies cannot change these policies. Typically, the only variation between policies through different insurance companies is the cost of the policy. Strict regulation through federal and state laws governs what is covered in these Medicare supplement policies, and these regulations are designed to protect those that receive Medicare.

What Medicare Supplement Policies Do Not Cover

Medicare Supplement policies do not cover any care that is considered long-term, such as care in a nursing home, hearing aids, eyeglasses, vision or dental care, and private-duty nursing. All new supplement policies are guaranteed to be renewable-meaning the insurance company will never terminate your policy as long as you pay the premium. Even though some previous Medicare policies paid the cost of prescription drugs, no new Medicare Supplement policies are allowed to include prescription drug coverage. So, if you would like to receive prescription drug coverage, it is advisable to join a Medicare Prescription Drug Plan (Part D) offered through private companies that are Medicare-approved.

When to Buy a Medicare Supplement Plan

The open enrollment period is the best time to apply for a Medicare supplement plan. This time to enroll only lasts for 6 months and begins on the first day of the month in which you are both age 65 or older and enrolled in Medicare Part B. During the enrollment period insurance companies cannot use any medical “underwriting,” which means that they can’t refuse to sell you their supplement policy, make you wait for coverage to begin, or charge you excess for a policy due to your health problems. The insurance company can never require a pre-existing condition waiting period if you buy a supplement policy when you have a guaranteed time period to purchase it.

Before your open enrollment period begins, you can send in your application for a Medicare supplement policy. Sometimes you may have coverage that ends once you turn age 65, so this may be very important if you want to guarantee continuous health coverage.

Your open enrollment period is extremely important because you can buy any supplement policy the company sells during this period. If you wait too long to apply for Medicare coverage and pass the time span of your open enrollment period, there is no promise that an insurance company will sell you a policy. When your open enrollment period is over, insurance companies are permitted to decide whether they will accept your application and how much they will charge you for the policy by the use of medical underwriting.

Medicare Supplement Policy Costs

The cost of Medicare supplement policies can differ widely because the premiums that insurance companies charge will vary from company to company. The coverage with each policy is always the same, no matter what company you choose, so keep that in mind when you are shopping around for a supplement policy. Also, remember that the cost goes up once your open enrollment period ends.

What is Medicare SELECT?

As mentioned earlier, some states offer another type of supplement policy known as Medicare SELECT. Medicare SELECT can be any of the standardized Supplement Plans A through L; however, you must use certain hospitals and sometimes, specific doctors in order to receive your full insurance benefits (except in emergency situations). Medicare SELECT policies are generally cheaper than other Medicare Supplement policies, but you will have to pay whatever costs Medicare doesn’t pay in non-emergency situations.