People come to us confused about which insurance company they should pick for their Medicare Supplement. Perhaps you may be confused too.
We have helped many seniors compare Medicare supplement plans to choose the right company for their needs…
…but there is something you must consider before you compare Medicare supplement plans.
You need to thoroughly examine the pros and cons of a Medicare supplement policy.
Below, we will guide you through the 6 most overlooked and, as it turns out, the most important.
First, About Medicare
Most people qualify for Medicare when they turn 65. It covers most but not all of your health care costs. Original Medicare has two parts, Part A and Part B.
Part A covers in-hospital costs and Part B covers outpatient medical expenses,
You will pay a deductible out-of-pocket when you enter the hospital, and you will pay about 20% out-of-pocket for all outpatient costs like doctor visits, lab work, tests, ambulance service, and outpatient surgeries.
Generally, you will not have to pay a monthly premium for Part A, and you will pay a monthly premium ($104.90 in 2014) for Part B.
So, many individuals who turn 65 purchase a Medicare supplement policy (also known as a Medigap policy) to pay for those out-of-pocket health care costs that Medicare doesn’t pay.
The “Pro’s” of Medicare Supplement Policies
The first significant “pro” is that all insurance companies that offer a Medicare Supplement Policy have several plans to choose from, giving you choices of coverage and cost.
All plan names are letters like Plan A, Plan B, Plan F, Plan N, etc. And, all companies that offer these plans must offer exactly the same benefits for a particular plan, as specified by Medicare.
For example, the Plan F offered by one company has exactly the same benefits as the Plan F offered by any other company. This makes your decision process a little easier to handle.
The chart below shows the plan names and basic information about the different benefits that Medigap policies cover. If a check mark appears, the plan covers the described benefit 100%. If a percentage appears, the plan covers that percentage of the benefit. If the space is blank, there is no coverage for that benefit.
The second usually overlooked “pro” is that the richest of all the plans, Plan F, pays 100% of your out-of-pocket expenses associated with a Medicare approved benefit
So that means if you have a Medicare approved hospital stay, doctor visit, or other medical test done, Medicare and your plan F will pay 100% of those health care costs. You will no longer have to worry about copays and deductibles of any Medicare approved costs.
Another significant “pro” is that with a Medicare Supplement Policy, you may see any doctor or specialist that accepts Medicare. You are not subject to an HMO network and “gatekeeper” rules.
For most people who compare Medicare Supplement Plans, the ability to see any doctor that accepts Medicare is extremely important and the reason they chose to enroll in a supplement plan.
The “Con’s” of Medicare Supplement Policies
There are some “cons” that you must be aware of.
The first “con” is that a Medicare Supplement policy costs more than a typical Medicare Advantage Plan(Medicare Advantage Plans are the other option for paying for your out-of-pocket costs and are the subject of another article).
The average monthly premium for someone age 65 ranges from about $127 to over $200 depending on the insurance company. Premiums vary from company to company.
The second “con” is that your premium will most likely go up a few percentage points every year. So you will almost certainly be paying more for the same coverage as you get older.
The third ‘con” is that you must qualify medically for a supplement policy if you are more than 6 months past your 65th birthday and do not have current qualifying coverage.
If you are applying for this coverage at, say, age 67, and you no longer have medical coverage from your employment, you will need to answer some medical history questions.
In conclusion, there are certainly pros and cons when considering a Medicare supplement policy which you need to be aware of and examine thoroughly.
In my experience, many individuals turning 65, after reviewing the real pros and cons of a Medicare supplement policy conclude it was time well spent in the process to Compare Medicare Supplement plans.
For more information on plan choices, premiums, suitability of all Medicare supplement policies offered in your area, Medicare Advantage Plans, and Medicare Part D Plans, call Joe D’Aura at 415-999-5071 or drop us a line.