Medigap is great, right? So, why wouldn’t you want to choose a Medigap plan? Well, here are some little secrets no one talks about!
What is Medigap
First let’s talk briefly about what exactly medicare supplements are. Medicare supplement plans supplement the financial gaps of Original Medicare. Original Medicare will cover most of your medical needs for hospital stays, inpatient and outpatient procedures, doctors and specialist visits and vaccinations. However, there are copays or coinsurance as well as deductibles.
Because there are no out of pocket maximums with Original Medicare, these copays or coinsurances can be rather significant if you have major medical needs. Medicare supplement plans cover these out of pocket costs and may even help with an out of pocket maximum if necessary.
But remember, Medigap plans do not offer additional benefits not already offered by Original Medicare such as dental, vision, hearing, and prescription drugs. They are simply a financial solution to unknown and potentially large costs.
Because they provide such comprehensive health coverage, they are an extremely popular option amongst many Medicare beneficiaries. So why wouldn’t you want one?
Missing Your Enrollment
There are many different enrollment periods to keep track of with Original medicare. However, there isn’t actually a specific enrollment period for Medigap. You can actually enroll year round.
However, it is in your best interest to enroll when you first become eligible in the six months after you turn 65 and enroll in Part B. During this time you will not be subject to medical underwriting. After this time, you may be subject to medical underwriting and could therefore be charged more or denied outright.
This is very common. The sneaky little secret is that, in most states, you can be denied based on your health. Very often, people looking to save money put off Medigap enrollment and then when their medical bills and health concerns have begun to increase they seek to enroll.
At this point, many plans will deny you outright. Those who are willing to take on beneficiaries with significant health concerns may charge you so much that they no longer become financially feasible.
So, please take advantage of the six month window without medical underwriting. Unless, of course, you live in or are planning on moving to one of the few states that does not have medical underwriting.
Choosing the Wrong Carrier
It is hardly a secret that Medigap plans like all health insurance tend to increase on a yearly basis. This is to account for inflation and rising healthcare costs.
Although this is normal, some plans have a history of lower or more stable increases than others. There are issue age, attained age and community rated plans. Talk with your broker about the best plan for you.
In general we recommend working with a broker because they will also know which carriers are more likely to hike the rates up significantly. A broker can be more secret weapon in navigating Medicare!
Remember, with Medigap, benefits are standardized. So carriers may differ, but benefits will remain the same and if your doctor accepts Original Medicare, they accept your supplement plan regardless of who the carrier is.
This ties into the point that I just made. If you sign up for a plan and realize you need to change the next year because of dramatic rate increases, you may have to undergo medical underwriting. That can leave you in a difficult financial position.
Picking the Wrong Plan
Picking the wrong plan is also dangerous. There are 10 plans to choose from with varying levels of coverage and price points.
Plans G and N will offer the most coverage to new enrollees. Plan A may offer lower premiums, but has very little coverage. Plans K & L are cost-sharing plans. So they will cover a portion of the benefits. But with Plan K only covering 50%, it may not be enough to offset large bills.
Again if you have to change plans, you may run into that “secret” issue of medical underwriting. So it is important that you choose the right plan from the beginning.
Jesse Smedley is the Principal Broker for iHealthBrokers and the founder, president, and CEO of Smedley Insurance Group, Inc. and iHealthBrokers.com. Since the inception of SIG in 2007, Jesse has been dedicated to helping people save money on their health insurance by providing them with resources to educate themselves on all their health insurance options, both under age 65 and Medicare beneficiaries. He is featured in many publications as well as writes regularly for expert columns regarding health insurance and Medicare.
