senior couple looking to enroll in supplemental insuranceLet’s Break it Down

Medigap is private health insurance that is standardized by the government and helps pay healthcare costs that are not covered under Medicare. The various Medigap plans will cover different services and costs.

In general there are a few ideas to understand when learning about Medigap policies:

  • Medigap is a form of private health insurance that you may purchase on your own. It “fills in the gaps” of your Medicare coverage
  • If you have elected to go with Medicare Part C (Medicare Advantage), then you are not able to purchase Medigap
  • You will need to purchase a plan for yourself and your spouse on an individual basis

In order to purchase one of these policies, you must first have Medicare Parts A & B. The private insurance that you will obtain will assist you with some of the related healthcare costs that are not covered by Medicare such as deductibles, co-payments, and coinsurance. When you have a medical expense, Medicare Parts A & B will take care of any approved amounts first, and then your Medigap policy will pay the part that it covers.

It is important to note that each Medigap plan covers a different set of services and costs. In general, Medigap policies do not cover long-term care, dental, vision, eyeglasses, hearing aids, or private-duty nursing. Make sure you understand the details of any insurance policy that you are considering so that you understand the specific details about what is or is not covered.

Also, these plans do not have any networks, and they do not require any referrals. If a physician accepts Medicare, then he or she will accept a supplement. These plans do not include prescription drug coverage.


Private Insurance Companies

Private insurance companies handle selling Medigap policies. These companies may charge differently for a policy, but the benefits remain the same. For example, if you sign up for plan B, it will always have the same specific benefits regardless of which company sells it.

In terms of costs, you will be responsible for a monthly premium. The insurance company will set its prices that are subject to approval from the PA Insurance Department. Here are some helpful ways to consider how the policies are designed:

  • With community-rated pricing, the premium is not determined by your age
  • The same premium is charged to all participants
  • Age-specific premiums – if you buy the policy while you are younger, you will pay a lower premium. If you buy it when you become older, you will pay a higher premium
  • Attained age premiums are available and will increase as you get older. In many cases, these will start out as the least expensive but may become the most expensive as you age. For the most part, premiums may increase simply due to inflation and other factors year to year

 Pricing Factors

There are additional factors that can impact the pricing of your Medigap policy:

  • High-deductible option (Plan F) – If you buy the plan that has the high deductible option, you will be responsible for all deductibles, coinsurance, and co-payments each year until you have reached the high deductible, at which point the policy will take over and pay your benefits. The Consumer Price Index has a direct influence, and the deductible will adjust accordingly each year. The premium for this policy can be much lower than other plans that do not incorporate the high deductible selection.
  • Medical Underwriting – When deciding how much to charge you for insurance, the insurance company will consider your medical history. During your open enrollment period, companies may or may not use medical underwriting.
  • Some insurance companies will offer discounts if you are a non-smoker for example.  You might be able to pay your premium yearly as opposed to monthly, buying a policy for your spouse as well as yourself, or having multiple policies that might include long-term care policy
  • Medicare SELECT – Certain hospitals or certain doctors are required under these policies (with the exception of emergencies) and are available for all Medigap plans. SELECT plans usually require a lower premium and if you don’t use a SELECT provider you normally have to pay all or some of what Medicare does not pay. Not all companies will offer Medicare SELECT

Open enrollment periods and guaranteed issue rights can also affect your premium.


 Open Enrollment

There is an open enrollment period specific to each individual. It will start on the first day of the month in which you enrolled in Medicare Part B. This period will last for six months and during this time an insurance company must offer all plans that it sells and may not use your medical history or medical underwriting to refuse to sell you a policy or charge you more. They also may not make you wait for coverage to start although in some cases they might make you wait for coverage if you have a pre-existing condition.

During the first six months of your coverage, some pre-existing medical conditions may not be covered unless you had prior coverage such as Medical Assistance, individual health insurance, Medicare or group health insurance.

You will get the best price for a Medigap policy during your open enrollment period. This enrollment period is different than open enrollment for Medicare Advantage Plans.


Important Facts About PA Medigap

  • Medicare Parts A & B are mandatory
  • You must leave a Medicare Advantage Plan (Part C) before your Medigap policy begins
  • In addition to your monthly Part B premium, you will be required to pay the private insurance company a monthly premium for Medigap
  • Only one person is covered. If you and a spouse want coverage, you must purchase a separate policy
  • You are permitted to buy a policy from any licensed insurance company in your state
  • Standardized Medigap policies are guaranteed renewable even if you have a medical problem. The insurance company is not permitted to cancel your policy as long as your premium is paid
  • In the past, some policies covered prescription drugs, but anything sold after January 1st, 2006 does not include prescription drug coverage. You can join Medicare Part D if you need a prescription drug plan
  • If you have a Medicare Medical Savings Plan (MSA), it is against the law for anyone to sell you a Medigap policy

 FAQs

I changed my mind after receiving my policy – what should I do?

You may review your policy for 30 days once you review it. Within this timeframe, you may return it, and the insurance company will refund the premium in full.

If I have Medicare Part C (Advantage) but will be returning to Original Medicare – can I sign up for Medigap?

You may apply for a Medigap plan before you Medicare Advantage plan ends.

I have end-stage renal disease (ESRD) or disability but am under age 65. Can I enroll in a Medigap policy?

Insurance companies in PA are required to sell you a policy if you are within your open enrollment period.

Can I cancel my policy?

You must contact your insurance company directly to cancel your plan, and your insurance agent may not do this on your behalf.

If I have health problems, is there a risk that my insurance company will cancel my policy?

Standardized policies are guaranteed renewable. As long as you pay the premium the company cannot cancel your plan.

Do these policies cover prescription drugs?

Any policy sold after January 1, 2006, does not include prescription drug coverage. You must join Medicare Part D to receive this benefit.


Your Recommended Agent is Greg from BGA Insurance Group

greg gudis

Greg Gudis – Licensed agent ready to assist you during the enrollment period in 2017. Please fill out the form below to send your information to Greg so that he can contact you with the best advice and plan information for your current situation. He can also provide expert advice on retirement planning, life insurance, and long-term care.

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