What is Medicare Supplemental Insurance?
Medigap policies are an option when you become eligible for Medicare. These Medicare supplemental insurance plans can assist in paying costs over and above what Original Medicare covers. Before you choose your Medigap policy there are a questions you need to ask both yourself and your insurer. There are a number of Medicare options and some of them preclude the need for supplemental coverage.
The first thing you should do, after joining Original Medicare, is assess what coverage you have through your plan or plans. Then you should consider what sort of care you need and might need in the near future. If you find Original Medicare does not cover (or completely cover) all your needs, you can look into a Medigap policy.
Once you know a Medigap policy is for you find out which insurance companies offer Medigap in your state. You can do this by calling your State Health Insurance Assistance Program. Ask them if there is a Medigap Rate Comparison Shopping Guide for your state. Such a guide will list companies who offer Medicare supplemental insurance in your state. You can also call Medicare at 1-800-MEDICARE (633-4227).
Different companies charge different amounts—even for the SAME policy. Make sure you contact several companies in your state. Ensure that the companies you are considering are honest. You can do this in a few ways:
- Call your State Insurance Department and ask if they keep a record of complaints that can be shared with you.
- Call your Stat Health Insurance Assistance Program which offer free help for consumers.
- Research at the library or online using such resources as: TheStreet.com, A.M. Best and Standard and Poor (these will let you know if the company is fiscally sound).
- Talk to friends, neighbors, family, your insurance agents, or others you know who have a Medigap policy from the insurance company you are considering.
Once you are done with these steps contact the insurance companies. Be sure you are in your Medigap open enrollment period (6 months after you are both 65 AND enrolled in Medicare Part B) or that you have a guarantee issue right. Your State Insurance Assistance Program can give you further information on guaranteed rights.
Here are some of the questions you may want to consider for insurance companies:
- Is the company licensed in your state?
- Do they offer the plan you want? Not all companies sell all plans.
- Do they use medical underwriting for the Medigap policy?
- Will there be a waiting period for pre-existing conditions. Is this O.K. for you if so?
- How is the policy priced? There are three possibilities: issue-age, community, or attained age rating.
- At your age what would be the policy premium be and will this go up as you age?
- In the past several years has the premium for the policy increased for inflation or other reasons? How much?
- Does the company offer discounts or additional benefits?
- Is there any charge to process claims automatically?
Be sure to keep an eye out for illegal or unethical practices. No one should ever pressure you or lie in order for you to change policies. They also shouldn’t try to sell you a Medigap policy when you already have one (except in certain situations such as you contacting them). You should also beware of anyone trying to sell you a Medigap policy when you have a Medicare Advantage Plan unless your Advantage plan coverage will end before the Medigap coverage begins. Finally no one should insinuate a Medigap policy is part of any Federal program. Some policies are illegal to sell in some states. Beware of companies who claim they can sell you a policy that is illegal in your state.
After you have found a reputable company who sells a policy that meets your need you should apply for that policy. The insurer should give you a clearly worded summary of the policy and you should read it with care. If there is anything that is unclear ask for clarification. Other things to consider:
- Fill out the application completely and carefully (if someone else fills out the form check it over). Answers can impact eligibility.
- Answer medical questions carefully and completely. If you are buying during the open enrollment period you cannot be denied due to these answers.
- The insurer cannot require you to take a genetic test or ask questions on your genetic history.
- It is best to pay with check, money order , bank draft or electronic transfer (when available) payable to the insurance company—not the agent.
- If you buy from an agent get a receipt with the insurance company name, address and telephone.
- Ask your provider to make your policy active when you want it to start (usually the month after first of the month in the month after you apply). If they will not do this for you call your State Insurance Department.
- If you do not get your Medigap policy within 30 days call your insurer. If it takes more than 60 days call your State Insurance Department.
- You cannot be sold a second policy unless you notify them in writing you are canceling your first policy.
- Once your new policy is in effect you have 30 days to decide if you want to keep the policy. This “free look” begins the day you get your Medigap policy. You will have to pay both policy premiums for one month when switching