What are Your Rights when Buying a Medigap Policy?

medicare supplement insurance

Medicare supplement insurance plans are available to fill the gaps in Original Medicare coverage. A private health insurance comparison can help determine which of the ten current plans are best for you. A number of private health insurance providers offer such coverage, and while all the medical supplement insurance plans are standardized and must be identical, there is nothing to prevent divergent pricing.

Your Medigap comparison should, however, be about more than just Medigap rates. The rates matter, but the performance of the company is equally important. One way you can check is to contact others you know and trust who have Medigap plans; friends, family and others. You should also be sure to compare Original Medicare plus Medigap coverage to Medicare Advantage plans and other options.

What the given Medigap plans offer is as significant as the cost. The price and services should be weighed with each other to make your Medigap coverage decision. Currently, there are ten plans, signified by letters that you can purchase. There are other discontinued,plans that you can continue if you purchased them before June 1, 2010.

There are various pieces of Medigap plans that are uniform. They all cover Part A Hospital costs up to 365 more days after Medicare hospital costs are used up (if at slightly different percentages). The same is true of coverage for; the first three pints of blood you use in the hospital, Part A hospice care coinsurance and copayments. All of the Medigap plans also cover Medicare Preventive Care Part B Insurance and they all do so at a rate of 100 percent.

Not all of the plans cover Skilled Nursing Facility care coinsurance. Nor do they all cover the deductible for Medicare Part A. Even fewer cover the Medicare Part B deductible. Medicare Part B Excess Charges are likewise only covered by two of the available plans.

Foreign Travel Emergencies are covered to 100% by six different plans. These should be considered by people who travel extensively. Medicare doesn’t offer extensive service outside the USA and its territories.

You need to ask yourself which of the services you need covered most and then you need to compare costs between the plans, between the different insurance companies offering the plans and with other plans where you can get coverage (including but not limited to Medicare Advantage Plans). Be aware that not all insurance companies will offer all of the Medigap plans.

There are a number of issues that can help you determine which plan is best for you. How much can you afford to pay in monthly premiums for a Medigap plan? Once you decide on a plan compare the cost with other companies and plans. Think hard about the benefits you actually need. There is no reason to pay for benefits you are unlikely to use. For instance, if you do not travel why get the Foreign Travel Emergency coverage? Is filing a claim for the plan or with the insurer difficult? Do you have to file the claim or can your doctor do it on your behalf? Do you have a pre-existing condition and if so will the plan or insurer require you to wait for coverage of this condition?

Also pay close attention to how your Medigap premiums are set. How the prices are set can determine not only how much you pay now but how much you may wind up paying in the future. There are three ways to determine what your payment will be.

  • Community-rated or no-age rated refers to a policy that is priced the same for all regardless of age. The price may still go up for factors such as inflation and other issues but never for your age.
  • Issue-age rated policies are lower priced if you buy at a younger age. You are charged the same as others in your area that are the same age. Premiums can go up but, again, not because of your age. Basically the younger you are when you get the plan the cheaper it is and will remain.
  • Attained–age rated plans are cheaper to begin but they go up as you age. They can also go up for inflation and other reasons.

All plans are liable to go up for inflation and rising health costs. Some companies may, however, increase rates more rapidly than others. Comparing rates for the plans requires that you compare the identically lettered plans among the different insurance companies who offer those plans. Consider how the plans initial prices are determined.

There are some other cost issues that might be worth looking into. If you are married will the insurance company offer a discount if you and your spouse sign up? Do they offer other discounts at all?

You may also want to check to see if Medicare SELECT policies are offered in your area. They are not offered everywhere but they are a Medigap policy that requires you to use certain hospitals and, occasionally, doctors. These plans can be cheaper. Find out if high deductible plans are offered in your area if these plans appeal to you. The premiums may be lower since you pay the first $2000 yourself (in 2010, it may increase in subsequent years).

The main factors in determining if a Medigap plan is the one for you are the benefits offered (and will you use them), how much the plan costs, and what other options are available. Compare all the factors and determine which, if any, of the plans most suit your needs and your finances.