If you are concerned about your out of pocket expenses that are not covered by Original Medicare, you may want to consider purchasing a Medicare Supplement policy to help cover some of your costs.
A Medicare Supplement policy, also known as Medigap, helps pays for some coinsurance, copayments, and deductibles that are not included in your Original Medicare Part A (hospital insurance) and Part B (medical insurance) benefits. Some Medigap plans also offer coverage for extra benefits like travel outside the United States or longer stays in health care facilities.
Although all of the available Medigap policies are standardized across the United States as to their coverage, costs may vary between policies, states, and providers. If you are considering purchasing a policy, you should take time to compare policies.
How do you pay for a Medicare supplement policy?
In order to be eligible to purchase any Medicare Supplement policy, you must first be 65 years of age and enrolled in Original Medicare Part A (hospital insurance) and Part B (medical insurance). You are responsible for paying your monthly Medicare Part B premium even if you have supplemental insurance that covers other out of pocket expenses. As of 2020, the Medicare Part B premium is $144.60. This is an increase of $9.10 from the amount of $135.50 in 2019.
Together with your Part B premium, you must pay a monthly premium to your private insurance provider for your Medigap policy. Prices vary from company to company and location plays a large role in the amount. Private insurance providers also use different pricing systems which may affect your monthly cost. Some companies use a community rated system which means that your age is not a factor in your cost. If you purchase a policy based on an issue-age rated system, your age is a factor. If the company uses an attained age rated system, your premium increases with age. Make sure you check the details, so you know which pricing system your company uses before you sign up.
Even though plans may have a different premium cost, private insurance providers are required to follow federal and state laws and can only sell a standardized plan that provides the same benefits as anywhere else in the country. These laws are meant to protect all beneficiaries no matter where you purchase your Medigap plan. When you receive the printed copy of your plan, it must clearly state that it is Medicare Supplement insurance on the title page.
In most cases, you pay your monthly Medigap premium directly to your private insurance provider. You do not pay this premium together with your Original Medicare Part B premium. If you are not sure where to send your Medigap premium payment, contact your insurance provider for clarification. Remember that one Medicare supplement insurance plan covers only one person. If you want coverage for your spouse as well, you must get a separate policy.
It is also important to note that Medigap policies do not include coverage for prescription drugs. You must enroll in a separate Medicare Prescription Drug Plan (Part D). Medicare Part D plans are also sold by private insurance providers that are approved by Medicare.
It is important to have all the facts about a Medicare Supplement plan before you sign up. If you have questions, be sure to ask a representative of the insurance company providing the plan so you can make an informed decision.