In 2019, beneficiaries of Original Medicare (Part A and Part B) in good health pay an average of $7,850 in annual Medicare costs.1 This amount includes premiums and prescription drug costs, in addition to out-of-pocket costs that Medicare Supplement Insurance may cover.
Millions of Medicare beneficiaries choose to buy Medicare Supplement Insurance (Medigap) to help cover some of these costs. In fact, 34 percent of Medicare Part A and Part B (this doesn’t include those enrolled in a Medicare Advantage plan) beneficiaries were enrolled in a Medigap plan in 2016.2
So how do you decide if Medicare Supplement Insurance is right for you? This guide outlines some of the benefits offered by each type of Medigap plan as well as their costs, so that you can find a plan that fits your needs.
There are 9 potential benefits that can be offered by the 10 standardized Medicare Supplement Insurance plans available in most states in 2019:
The chart below outlines the benefits covered by each type of Medigap plan.
|Medicare Supplement Benefits||A||B||C||D||F1||G||K2||L3||M||N4|
|Part A co-insurance and hospital costs||✓||✓||✓||✓||✓||✓||✓||✓||✓||✓|
|Part B co-insurance or co-payment||✓||✓||✓||✓||✓||✓||50%||75%||✓||✓|
|First 3 pints of blood||✓||✓||✓||✓||✓||✓||50%||75%||✓||✓|
|Part A hospice care co-insurance or co-payment||✓||✓||✓||✓||✓||✓||50%||75%||✓||✓|
|Co-insurance for skilled nursing facility||✓||✓||✓||✓||50%||75%||✓||✓|
|Medicare Part A deductible||✓||✓||✓||✓||✓||50%||75%||50%||✓|
|Medicare Part B deductible||✓||✓|
|Medicare Part B excess charges||✓||✓|
|Foreign travel emergency||80%||80%||80%||80%||80%||80%|
|1. Plan F offers a high-deductible plan. This plan requires you to pay a $2,300 deductible in 2019 before it covers anything.
2. Plan K has an out-of-pocket yearly limit of $5,560 in 2019. After you pay the out-of-pocket yearly limit and yearly Part B deductible, it pays 100% of covered services for the rest of the calendar year.
3. Plan L has an out-of-pocket yearly limit of $2,780 in 2019. After you pay the out-of-pocket yearly limit and yearly Part B deductible, it pays 100% of covered services for the rest of the calendar year.
4. Plan N pays 100% of the Part B coinsurance, except for a copayment of up to $20 for some office visits and up to a $50 copayment for emergency room visits that don’t result in an inpatient admission.
View an image version of this table.
When you go to the doctor and use your Original Medicare benefits, your costs are not covered in full (except in the case of certain preventative services).
This is where Medicare Supplement Insurance comes in.
You pay a monthly premium to belong to a Medicare Supplement Insurance plan, just like you would for many other types of health insurance. You also continue to pay your Medicare Part B premium ($135.50 per month or higher in 2019, depending on your income).
The average monthly premium for a Medicare Supplement Insurance plan in 2018 was $125.93 per month.3
It’s important to note that each type of Medigap plan offers a different combination of standardized benefits. Plans with fewer benefits may offer lower premiums.
Other factors such as age, gender, smoking status, health and where you live can also affect Medigap plan rates.
You can enroll in a Medicare Supplement Insurance plan at any time.
However, a good time to buy a Medigap plan is during your Medigap Open Enrollment Period (OEP), which begins as soon as you are at least 65 and enrolled in Medicare Part B.
During your Medigap Open Enrollment Period, Medicare Supplement Insurance companies can’t use your medical history or current health status to determine your eligibility for a Medigap plan or to charge you higher plan premiums.
Outside of your Medigap Open Enrollment Period, you may have what are called “guaranteed issue rights.”
Having a guaranteed issue right means Medicare Supplement Insurance companies cannot perform any medical underwriting in determining your Medigap premium. In other words, you cannot be charged more for a plan because of your health.
There are several circumstances that could qualify you for a Medigap guaranteed issue right.
Certain guaranteed issue rights may limit the plan types you may buy.
A licensed insurance agent can help you learn more about Medicare Supplement Insurance companies and the Medigap plans that may be available where you live.
Explore the plans that offer the benefits you want and find out their costs so that you can find a plan that works for you.
Learn about Medigap plans in your areaVisit MedicareSupplement.com
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1 Medicare.gov. Estimated Out-of-Pocket Costs (OOPC) for People in Good Health. Retrieved May 6, 2019, from www.medicare.gov/find-a-plan/staticpages/medigap-out-of-pocket-costs.aspx.
2 AHIP. The State of Medigap 2018. (June, 2018). Retrieved from www.ahip.org/wp-content/uploads/2018/06/State_of_Medigap18_FINAL.pdf.
3 TZ Insurance Solutions LLC internal sales data, 2019. This data is based on the Medicare Supplement Insurance policies TZ Insurance Solutions LLC has sold. It is not a comprehensive national average of all available Medicare Supplement Insurance plan premiums.
MedicareAdvantage.com is a website owned and operated by TZ Insurance Solutions LLC. TZ Insurance Solutions LLC and TruBridge, Inc. represent Medicare Advantage Organizations and Prescription Drug Plans having Medicare contracts; enrollment in any plan depends upon contract renewal.
Plan availability varies by region and state. For a complete list of available plans, please contact 1-800-MEDICARE (TTY users should call 1-877-486-2048), 24 hours a day/7 days a week or consult www.medicare.gov.
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