Four Steps to Buying Medicare Supplement Plans

Steven Mott by Steven Mott | Licensed since 2012
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This article was updated on: 09/16/2018

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You may have heard that Medicare Supplement (Medigap) policy can help you save on out-of-pocket costs from Medicare. If you want to buy a Medicare Supplement policy, here are the steps:

1. Before buying, be sure that you are eligible for a Medicare Supplement policy and in your Open Enrollment Period.

The best time to buy a Medicare Supplement policy is during your Medicare Supplement Open Enrollment Period. This period lasts for six months and begins on the first day of month that you are both 65 or older, and enrolled in Medicare Part B. During your Medicare Supplement Open Enrollment Period you can buy any plan available in your area and you can’t be turned down based on your medical history (although a waiting period might apply).

After this six-month period, insurance companies may consider your health and medical history when deciding whether or not to sell you a plan, and may turn you down or charge you more if you have a pre-existing condition.

You are not eligible for a Medicare Supplement policy until you are enrolled in both Medicare Part A and Part B.

You may also not be eligible for Medicare Supplement insurance if you are under 65, even if you have Medicare Part A and Part B. Federal law doesn’t require that private insurance companies sell Medicare Supplement plans to people under 65. However, some states do require private insurance companies to sell Medicare Supplement policies to people under 65. Contact your state insurance department to find out whether you can buy a Medicare Supplement plan under the age of 65,

 2. Determine which Medicare Supplement policy may meet your needs.

In most states, there are up to 10 Medicare Supplement plans that are standardized and labeled A-N (A, B, C, D, F, G, K, L, M, N) which may cover different Medicare out-of-pocket costs at different percentages (usually 50%, 75% or 100%). Not all plans may be available in all areas. Wisconsin, Massachusetts, and Minnesota standardize their plans differently.

The most basic plan is Medicare Supplement Plan A. Plan A may cover:

  • 100% of the Medicare Part A coinsurance and hospital costs up to an additional 365 days after Medicare benefits are used up
  • 100% of Medicare Part B coinsurance or copayments
  • Blood (first 3 pints necessary for a medical procedure) at 100%
  • Medicare Part A hospice care coinsurance or copayment at 100%

The most comprehensive of these lettered standardized plans is Medicare Supplement Plan F. Plan F may cover everything Plan A covers, as well as:

  • Skilled nursing facility care coinsurance at 100%
  • Medicare Part A deductible at 100%
  • Medicare Part B deductible at 100%
  • Medicare Part B excess charges at 100%
  • Foreign travel emergency up to plan limits at 80%

Plan K and Plan L are the only two plans that establish out-of-pocket limits.

3. Understand the pricing differences with Medicare Supplement plans.

Medicare Supplement plans with more extensive coverage may have higher premiums.  However, the same plan from a different private insurance company may come at a different cost, depending on how the company prices its plans.

  • One way to price plans is without consideration to the applicant’s age. This is called “community-rated” or “no-age-rated.”
  • Another way to price plans is based on the age you are when you buy the policy. This is called “issued-age-rated.”
  • There’s one more way to price plans, which is based on the current age of the plan holder and continues to go up. This is called “attained-age-rated.”

Be sure to ask how you policy is priced before you buy it. Knowing how the plan is priced will help you predict how much you may be paying for it in the future.

4. Buy the Medicare Supplement policy.

Once you know you are eligible for a Medicare Supplement plan, know what extent of coverage you want, and know what you can expect with pricing, you are ready to buy a Medicare Supplement plan. Make a careful choice as you might not be able to switch plans in the future when your Open Enrollment Period has ended.

If you would like to know more about how to choose a Medicare Supplement plan, please feel free to reach out to me. If you prefer, you can schedule a phone call or request an email by clicking on the buttons below. You can also find out about plan options in your area by clicking the Compare Plans button.

The product and service descriptions, if any, provided on these Medicare.com Web pages are not intended to constitute offers to sell or solicitations in connection with any product or service. All products are not available in all areas and are subject to applicable laws, rules, and regulations.

Medicare Supplement insurance plans are not connected with or endorsed by the U.S. government or the Federal Medicare program.

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