Medicare supplement consumer benefits

Medicare Supplement Insurance (also called Medigap) is sold by private insurance companies. The insurance can help pay some of the health care costs that “Original Medicare” does not cover, such as copayments, coinsurance, and deductibles.
Some Medicare Supplement insurance policies also offer coverage for services that Original Medicare doesn’t cover, like medical care when you travel outside the U.S.
If you have Original Medicare and you buy a Medigap policy, Medicare pays its share of the Medicare-approved amount for covered health care costs. Then your Medicare Supplement insurance policy pays its share.

Find out about options for all the Medicare Advantage plans, Medicare Prescription Drug Plans, and Medicare Supplement plans.

What information do I need to know about Medigap plans?

There are four things to know.

  1. You are still in the Medicare program. When you purchase Medicare Supplement insurance, you do not cancel or replace your Medicare Part A and Part B coverage. You still have all your Medicare benefits, rights, and protections.
  2. Medicare Supplement insurance plans are standardized. By law there can be no difference in plans offered by different insurance companies. There is an exception for people who live in Massachusetts, Minnesota, or Wisconsin.
  3. Price and quality of service can vary from one insurer to another. Other than deciding which Medigap plan is best for you, comparing prices and selecting a quality insurance company are your most important decisions.
  4. Prescription drugs coverage is not included. But you can consider a Medicare Part D prescription drug plan to cover your drug costs. Medicare Supplement insurance plans sold before 2006 may offer coverage for prescription drugs.

Why do 13 million Americans have Medicare Supplement Insurance?

Peace of mind.
A Medicare Supplement insurance policy offers financial security and peace of mind. Peace of mind comes from knowing you have planned and are prepared for any costly health care surprises.

Freedom to choose
You control and choose to see any medical professional anytime, anywhere … as often as you need care. The only requirement is that they accept Medicare (and new patients).

Portable coverage
You are not restricted to use a network of health care providers. If you move, your Medigap coverage goes with you. You may even include foreign travel emergency benefits.

Guarantees that protect
In most cases your premium (monthly cost) is locked in for the first 12 months. (can vary by carrier) Plus, policies are guaranteed renewable. That means no worries about being cancelled or having benefits reduced if your premiums are paid on time.

Who is eligible for a Medigap plan?
You can apply for a Medicare Supplement insurance policy if you are:
1. A resident of a state where the policy is offered.
2. Enrolled in Medicare Parts A and B.
3. Age 65 or over or, in some states, under age 65 with a disability and/or end stage renal disease (plan offering, and eligibility vary by state).

When is the best time to buy A Medicare Supplement plan?
That depends. Most people enroll in Medicare when they turn 65. This is called the “Open Enrollment” period. It begins three months before your 65th birthday, includes the month of your 65th birthday and runs until six months after your birthday.

During the Open Enrollment period you qualify for guaranteed issue coverage. That means the insurance company must accept your application no matter what health conditions you have. This is an especially important fact to remember.

IMPORTANT INFORMATION:  Switching Medigap plans
There are reasons people switch their Medicare Supplement insurance plan.

  • You are paying for benefits you do not need.
  • You need or want more benefits than you needed before.
  • Your current Medigap policy has the right benefits but you want to change your insurance company.
  • You want to find a Medigap policy that is less expensive.

Before you switch do a careful comparison of benefits. If you bought your policy before 2010, it may offer coverage that is not available in newer plans. If you bought your policy before 1992, your policy might not be a “guaranteed renewable policy.” It may have a bigger premium increase than newer Medigap plans available.

Medicare Supplement
Plan F

2020
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Medicare Supplement
Plan G

2020
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Medicare Supplement
Plan N

2020
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Frequently Asked Medicare Supplement Questions

Medicare Part A coverage is responsible for hospital-related expenses.  In most cases, Medicare Part A doesn’t require a monthly premium. You paid for this during your working years by paying a minimum of 10 years of Social Security taxes through payroll.

Consequently, most people earn Medicare Part A.

In the event someone didn’t earn Medicare Part A, it can be purchased.  For those who need to purchase Medicare Part A they will spend up to $423 per month in 2020.

Below are some examples of Medicare Part A covered services:

  • Inpatient hospital care
  • Skilled nursing facility care
  • Blood
  • Hospice care
  • Home health services

Medicare Part B coverage is responsible for medical-related expenses.  When you are first eligible for Medicare, you have a 7-month initial enrollment period (IEP).

Your IEP begins 3 months before the month you turn 65, you birth month, and ends 3 months after.

Below are some common examples of Medicare Part B covered services:

  • Doctor’s visits
  • Ambulance services
  • Ambulatory surgical centers
  • Blood
  • Bone density tests
  • Breast cancer screening
  • Cardiac rehabilitation
  • Cardiovascular disease
  • Cervical screenings
  • Diabetes screening
  • Chronic care management
  • Colo-rectal cancer screenings
  • CPAP

Part B also has a monthly premium which is, in most cases, deducted from your Social Security check each month.  Part B premiums can be as low as $144 or as high as $428.60.

The range in price is directly correlated to your income.  Those individuals who qualify for Medicaid may not have to pay the Part B premium.

If for some reason you don’t elect Part B on time, you will be subject to a late enrollment penalty of 10% for every full 12 months they delay enrollment.

The Medicare Part B enrollment penalty can be waived in instances where the proposed insured has credible coverage, for example, you have existing coverage through an employer.

Lastly, Medicare Part B has an annual deductible of $198 (2020 data).  This deductible must be met before Medicare will begin paying.  At the point of meeting the deductible, you will be on the hook for 20% of the Medicare-approved amount.

A quick look at your Medicare coverage choices

There are 2 main options for how you get your Medicare coverage.

Option 1 – Original Medicare + Medicare Supplement (Medigap)

  • This includes Part A and Part B.
    • Part A – Hospital Insurance
    • Part B – Medical Insurance
    • You can Add: Part D – Medicare Prescription Drug Coverage
    • You can also Add: Medigap – Medicare Supplement Insurance.
    • (Medigap policies help pay your out-of-pocket costs in original Medicare.)
      • Affordable monthly premiums
      • No Network
      • Covers most Medicare related expenses with little out of pocket expense

Option 2 – Medicare Advantage (Part C)

  • These plans are like HMOs or PPOs, and typically include Part A, B and D
    • Part A – Hospital Insurance
    • Part B – Medical Insurance
    • Part D – Medicare Prescription Drug Coverage
    • (Most plans cover prescription drugs. If yours doesn’t you may be able to join a separate Part D plan.)
      • Advantage plans generally have little to no monthly premium
      • PPO or HMO Networks
      • Copays for most services
      • Preset maximum out-of-pocket for in or out of network
    • There are additional benefits for those with Medicare & Medicaid

Medicare Supplement insurance is also referred to as a Medigap policy by CMS.

These names are interchangeable.
You should expect to:

Medicare Supplements are accepted by any doctor that accepts Medicare, so there are few restrictions for the doctors and specialist your clients can see.
This is especially helpful for clients who travel frequently.  Medicare Supplements are not restricted like HMO or PPO plans, so clients won’t have problems using their coverage out of network.
Another great thing about Medicare Supplements is the plans are standardized across all the carriers.

Medicare Part C is commonly known as Medicare Advantage (MA plans)

Medicare Advantage is also offered in the common forms of an HMO or PPO plan from private insurance companies approved by Medicare.  This means that those who choose a Medicare Advantage plan are subject to using the doctors listed in the associated HMO (requires referral) or PPO (referrals NOT required) networks.
These are the plans that everyone sells during the annual enrollment period from October 15th through December 7th and some during the open enrollment period from January 1st to March 31st of each year.

Top Medicare Advantage Companies You Might Recognize

  • Aetna
  • Coventry
  • United Health Care
  • Humana
  • Cigna
  • Cigna HealthSpring
  • Anthem

The confusing part about Medicare Advantage is that client’s often think if they have a Medicare Advantage plan, that they no longer have Medicare.

That is false!

Parts A and B are required to enroll in Medicare Advantage.

The difference is that once you are enrolled in Medicare Advantage, the private insurance company becomes the primary payor instead of the Medicare program and assumes the liability of paying the Part A and Part B covered services.  This was a way for Medicare to cut spending and transfer the patient liability to the private insurance companies.  This transfer of liability is why you see some plans offering additional benefits such as dental, vision, hearing and wellness.  It’s the private insurance companies best interest to keep their policy holders healthy in order maintain acceptable loss ratios.

People choose Medicare Advantage for a few reasons:

  • Covers Part A and Part B deductibles
  • Carries little to no premiums (as of 2020)
  • Offers additional services such as hearing aids, wellness discounts and limited dental work.
  • Some plans include prescription drug coverage, reducing the out of pocket monthly premium costs.

Using Part C is one way you can limit your risk of the 20% liability of original Medicare.

Medicare Advantage Plans

Medicare Advantage Plans are a type of Medicare health plan offered by a private company that contracts with Medicare to provide all your Part A and Part B benefits. Most Medicare Advantage Plans also offer prescription drug coverage. If you’re enrolled in a Medicare Advantage Plan, most Medicare services are covered through the plan. Your Medicare services aren’t paid for by Original Medicare. Below are the most common types of Medicare Advantage Plans.

  • Health Maintenance Organization (HMO) Plans
  • Preferred Provider Organization (PPO) Plans
  • Private Fee-for-Service (PFFS) Plans
  • Special Needs Plans (SNPs)

Other less common types of Medicare Advantage Plans that may be available include HMO Point of Service (HMOPOS) Plans and a Medicare Medical Savings Account (MSA) Plan.

Here are 6 tips in helping you choose the correct Medicare drug coverage:

If you’re wondering how to choose a Medicare drug plan that works for you, the best way is to start by looking at your priorities. See if any of these apply to you:

I take specific drugs.
Look at drug plans that include your prescription drugs on their formulary (a list of prescription drugs covered by a drug plan). Then, compare costs.

I want extra protection from high prescription drug costs.
Look at drug plans offering coverage in the coverage gap, and then check with those plans to make sure they cover your drugs in the gap.

I want my drug expenses to be balanced throughout the year.
Look at drug plans with no or a low deductible, or with additional coverage in the coverage gap.

I take a lot of generic prescriptions.
Look at Medicare drug plans with “tiers” that charge you nothing or low co-payments for generic prescriptions.

I don’t have many drug costs now, but I want coverage for peace of mind and to avoid future penalties.
Look at Medicare drug plans with a low monthly premium for drug coverage. If you need prescription drugs in the future, all plans still must cover most drugs used by people with Medicare.

I like the extra benefits and lower costs available by getting my health care and prescription drug coverage from one plan, and I’m willing to pick a drug plan with restrictions on what doctors, hospitals, and other health care providers I can use.
Look for a Medicare Advantage Plan (Part C) with prescription drug coverage.

Feel Free to Call Accurate Health Plans for a Free, No Obligation Review of Your Part D Coverage @ 1 (800) 235-0876

What is my costs for Medicare drug coverage?

You’ll make these payments throughout the year in a Medicare drug plan:

  • Premium
  • Yearly deductible
  • Copayments or coinsurance
  • Costs in the coverage gap
  • Costs if you get Extra Help
  • Costs if you pay a late enrollment penalty

Your actual drug plan costs will vary depending on:

  • The drugs you use
  • The plan you choose
  • Whether you go to a pharmacy in your plan’s network
  • Whether the drugs you use are on your plan’s formulary
  • Whether you get Extra Help paying your Medicare Part D costs
  • Look for specific Medicare drug plan costs, and then call the plans you’re interested in to get more details.

Note
If your drug costs are higher than what you paid last year, talk to your doctor. There may be lower cost drugs you can use instead. This could save you in out-of-pocket costs throughout the year. If you want more information on drug prices, you can look at dashboards that highlight which manufacturers have been increasing their prices and also show other year-to-year drug price information. These are general or total prices and increases may not match changes in what you’ll pay.

If you have limited income and resources, your state may help you pay for Part A and/or Part B. You may also qualify for Extra Help to pay for your Medicare prescription drug coverage.

I’m eligible for both Medicare and Medicaid. What can I do?

Special enrollment periods if you get Extra Help

Join, switch, or drop your Medicare Advantage Plan or Medicare prescription drug coverage.

When?

One time during each of these periods:

  • January–March
  • April–June
  • July–September

If you make a change, it will take effect on the first day of the following month. You’ll have to wait for the next period to make another change. You can’t use this Special Enrollment Period from October–December. However, all people with Medicare can make changes to their coverage from October 15–December 7, and the changes will take effect on January 1.

I qualify for Extra Help paying for Medicare prescription drug coverage.

What can I do?

Join, switch, or drop Medicare prescription drug coverage.

When?

One time during each of these periods:

  • January–March
  • April–June
  • July–September

If you make a change, it will take effect on the first day of the following month. You’ll have to wait for the next period to make another change. You can’t use this Special Enrollment Period from October–December. However, all people with Medicare can make changes to their coverage from October 15–December 7, and the changes will take effect on January 1.

I’m enrolled in a State Pharmaceutical Assistance Program (SPAP) or lose SPAP eligibility.

What can I do?

Join either a Medicare Prescription Drug Plan or a Medicare Advantage Plan with prescription drug coverage.

When?

Once during the calendar year.

Medicare monthly premium for drug plans

Most Medicare Prescription Drug Plans charge a monthly fee that varies by plan. You pay this in addition to the Medicare Part B premium. If you join a Medicare Advantage Plan (Part C) or Medicare Cost Plan that includes Medicare prescription drug coverage, the plan’s monthly premium may include an amount for drug coverage.

Note:
The same insurance company may offer Medigap policies and Medicare Prescription Drug Plans.
If you join a Medigap policy and a Medicare drug plan offered by the same company, you may need to make 2 separate premium payments for your coverage. Contact your insurance company for more details.
Get your premium automatically deducted
Contact your drug plan (not Social Security) if you want your premium deducted from your monthly Social Security payment. Your first deduction will usually take 3 months to start, and 3 months of premiums will likely be deducted at once.

After that, only one premium will be deducted each month. You may also see a delay in premiums being withheld if you switch plans. If you want to stop premium deductions and get billed directly, contact your drug plan.

How much does Part D cost?
Most people only pay their Part D premium. If you don’t sign up for Part D when you’re first eligible, you may have to pay a Part D late enrollment penalty.

If your modified adjusted gross income is above a certain amount, you may pay a Part D income-related monthly adjustment amount (Part D IRMAA). Medicare uses the modified adjusted gross income reported on your IRS tax return from 2 years ago (the most recent tax return information provided to Social Security by the IRS). You’ll pay the Part D IRMAA amount in addition to your monthly plan premium, and this extra amount is paid directly to Medicare, not to your plan. The chart below lists the extra amount costs by income.

Social Security will contact you if you have to pay Part D IRMAA, based on your income. The amount you pay can change each year. If you have to pay a higher amount for your Part D premium and you disagree (for example, if your income goes down), use this form to contact Social Security [PDF, 125 KB]. If you have questions about your Medicare prescription drug coverage, contact your plan.

Note
The extra amount you have to pay isn’t part of your plan premium. You don’t pay the extra amount to your plan. Most people have the extra amount taken from their Social Security check. If the amount isn’t taken from your check, you’ll get a bill from Medicare or the Railroad Retirement Board. You must pay this amount to keep your Part D coverage. You’ll also have to pay this extra amount if you’re in a Medicare Advantage Plan that includes drug coverage.

If Social Security notifies you about paying a higher amount for your Part D coverage, you’re required by law to pay the Part D-Income Related Monthly Adjustment Amount (Part D IRMAA). If you don’t pay the Part D IRMAA, you’ll lose your Part D coverage.

Employer/Union coverage and Part D IRMAA

Note
You pay your Part D IRMAA directly to Medicare, not to your plan or employer.

You’re required to pay the Part D IRMAA, even if your employer or a third party (like a teacher’s union or a retirement system) pays for your Part D plan premiums. If you don’t pay the Part D IRMAA and get disenrolled, you may also lose your retirement coverage and you may not be able to get it back.

Things to remember
Pay your Part D IRMAA bill to Medicare as soon as you get it. Find out how to pay your bill. Keep your address current with Social Security, even if you don’t get a Social Security check.

Part D premiums by income
The chart below shows your estimated prescription drug plan monthly premium based on your income as reported on your IRS tax return. If your income is above a certain limit, you’ll pay an income-related monthly adjustment amount in addition to your plan premium.

2020