Whether you’re turning 65, planning ahead, or leaving a Medicare Advantage Plan, it is important to understand Medigap Policies and when and how to choose the right one for you. Medicare supplement policies are exactly what they sound like, supplemental insurance policies designed to cover costs that Medicare doesn’t cover.
You’ll want to enroll for a Medigap policy during the open enrollment. This is important because during this time period you cannot be denied coverage because of existing health problems. Nor can they charge you more for your coverage than other people. They also can’t make you wait for your coverage to start; except sometimes in circumstances applied to an existing condition. Outside of the enrollment period the insurance provider could use a medical underwriting to deny your enrollment. Open enrollment is usually a six month period after you have turned 65 and enrolled in Medicare part B. There may be other open enrollment periods depending on the state in which you reside.
There are of course exceptions to the open enrollment. Two examples are ending participation in a Medicare Advantage Plan or your current Medigap policy holder is going out of business. As long as you enroll in a Medigap policy within 63 days after this change you should not be charged more than the normal premium or denied enrollment.
Different Types of Policies
While there are many different types of policies available for Medigap they are actually simple to compare. This is because the federal and state governments have standardized these policies. Medigap policies are lettered from A to N. Each lettered policy must offer the same benefits so from insurance company to insurance company the policies of the same letter are equal.
The reason that the federal and state governments standardized the Medigap policies was to protect you. Standardizing the policies makes it easier for you to compare the policies. For example, Medigap policy A covers Medicare Part A Coinsurance and hospital costs up to an additional 365 days after Medicare benefits are used up, Medicare Part B Coinsurance or Copayment, the first three pints of blood, and Part A Hospice Care Coinsurance or Copayment. This is the same for every Medigap policy A no matter which company is offering the policy. As you compare the costs of Medigap policies you will know that policy A is the same from one company to the other and all that differs is the premium.
Policy Pricing
Another important thing to consider before purchasing a policy from any Medigap provider is how the premium is determined. The three types of pricing styles are called Community Related, Age-Issued Related, and Attained-Age Related pricing. Community Related pricing is a flat rate for everyone in the community regardless of age. Everyone pays the same monthly premium. Age-Issue Related pricing sets the policy price based on the age that you purchase the policy. The older you are, the higher your monthly payment will be. For Attained-Age Related pricing, your monthly payment for the policy will increase with each year. The cost of the policy will increase with each year. Your financial and health situations may affect which pricing style is best for you.
There are other factors that can affect your choice such as your financial position, the reputation of the companies providing services, and where you live. If you think you’ll need assistance with your Medigap premium there is the State Health Insurance Assistance Program, or SHIP. Massachusetts, Minnesota, and Wisconsin have plans markedly different than the rest of the country and if you live in these states you’ll want to do some extra research, starting with the Medicare website.
