Medicare is the United States health insurance program designed to provide coverage to people over the age of 65, individuals with end-stage renal disease and younger people with certain disabilities. One key benefit of Medicare is that it helps control a person’s health care costs as they age.

Although Medicare can cover much of your health care needs, it doesn’t cover everything. For that reason, some people purchase supplemental Medicare coverage, also known as a Medigap policy. There are several reasons why Medigap might make sense for you and provide the most comprehensive form of health coverage. Learn more about what’s covered by Medicare and what you can get from purchasing a supplemental Medicare insurance plan in California.

What Does Medicare Cover?

Medicare is a multi-part health insurance program. Each Medicare part covers a different type of health care need:

• Part A: Medicare Part A is also known as hospital insurance. There’s no premium for most people. The plan provides coverage should you need in-patient care at a hospital or care at a skilled nursing facility. The insurance also covers home health care and hospice care but will not provide coverage for long-term care at a nursing home.
• Part B: Medicare Part B provides coverage for preventative care and medically necessary treatments. It also provides coverage for doctors, lab tests, emergency room visits, ambulance services, and mental health care.

Both Medicare Part B and Part D require a monthly premium based on income. Medicare Part B also has an annual deductible, which is the amount you pay before the plan kicks in. After covering the yearly deductible, you are still responsible for 20% of the Medicare-approved cost of medical services or treatments.

Medicare Part D plans can also have an annual deductible, varying from plan to plan. Most Part D plans require either a copayment, such as $10 per prescription or a coinsurance payment, which is a percentage of the cost of a prescription medication. Usually, people who paid Medicare taxes while working can access Part A coverage without paying monthly premiums. Part A also has an annual deductible, which is considerably higher than the deductible for Part B.

Together, Medicare Part A and Part B are called Original Medicare because the federal government oversees the programs. You are eligible to see any health care provider who accepts Medicare if you have Original Medicare coverage.

What Does Medicare Not Cover?

Although Medicare can make health care more affordable for qualified individuals, it doesn’t cover everything. Original Medicare and Medicare Part D will not provide coverage for:

1. Medications (RX)
2. Dental care
3. Hearing aids
4. Eye exams
5. Dentures
6. Cosmetic surgery
7. Long-term or custodial care
8. Foot care
9. Acupuncture

What Is Supplemental Medicare Insurance?

Supplemental Medicare insurance, or Medigap, is a policy designed to cover the gaps in Medicare. Private insurance providers offer this coverage to help pay for some health care expenses excluded from Original Medicare. They complement each other to provide more comprehensive coverage.

You must have Medicare Parts A and B to qualify for Medigap. Also, you must pay the monthly premium under Medicare Part B and an additional premium to the insurance company. The policy automatically renews each year as long as you pay the premium. Federal and state laws regulate Medigap, so they are standardized.

Instead of a Supplement, you can get a Medicare Part C plan, which combines traditional Medicare coverage with other insurance protections. Knowing available coverage and your health care needs will help you choose the bundle of insurance policies that offers the most protection.

What Are the Types of Medigap Plans?

Just as there are multiple types of medical insurance, there are several supplemental insurance options. Like Original Medicare, Medigap plans are lettered, starting with A and running through N, although certain plans, such as E, I and J, are no longer available. Changes in the law mean that certain Medigap plans, such as Plan F, will no longer be sold to people as of 2020. Those plans are still available to people who already have them.

Some of the benefits offered by Medigap plans include:

1. Coverage of Part A coinsurance and hospital costs for up to an additional 365 days once Medicare Part A benefits are used up.
2. Coverage of Part B copayments or coinsurance.
3. Coverage of up to 3 pints of blood.
4. Coverage of coinsurance for hospice care under Part A.
5. Coverage of coinsurance for skilled nursing care under Part A.
6. Coverage of Part A deductible.
7. Coverage of Part B deductible. As of January 1, 2020, these plans are not sold to people who are newly eligible for Medicare.
8. Coverage of excess charges for Part B.
9. Foreign travel insurance coverage.

Original Medicare vs. Medigap: Tips for Future Planning

Original Medicare covers many health care expenses, but not all of them. Medicare Part B has a monthly premium, and both Part A and Part B have deductibles. Getting supplemental insurance makes sense if you anticipate having medical expenses that Medicare won’t cover.

It can be a smart move to sign up for a Medigap plan when you are first eligible to enroll in Medicare, even if you are not sure you will need it. The reason is simple — during your Medicare initial enrollment period, you can get a Medigap policy with guaranteed acceptance. After your initial enrollment period ends, you might not be able to buy a policy. The insurer might deny your supplement insurance coverage based on a preexisting condition.

What is Medicare Part D (Rx)?

Medicare Part D plans are sold by private insurance companies to work with Original Medicare and often a Supplement Plan to help reduce medication costs for their members. Since Original Medicare doesn’t cover medications and a Supplement Plan can’t work with an Advantage Plan, these Part D Plans fill in the medication piece of the health insurance puzzle.

Alternative Options to Medicare Supplement Plans

There is another alternative medical coverage called Medical Advantage:

What Is Medicare Advantage?

Medicare Part C, also known as Medicare Advantage, is neither Medigap insurance nor the same as Original Medicare. If you have Original Medicare from the federal government, you can enroll in Part C. However, enrolling in Part C removes the option of enrolling in a supplemental Medigap plan.

How Does Medicare Advantage Work?

Medicare Advantage plans are offered by private insurance companies. They bundle Medicare Part A, Part B and often Part D services with other insurance coverage, such as dental and vision insurance. The insurance companies that offer Medicare Advantage plans need to be approved by the federal government. Medicare pays the insurance companies a set amount each month for your health care. To continue to offer Medicare Part C plans, the insurance company needs to follow the regulations and rules set forth by Medicare.

How Much Does Medicare Advantage Cost?

The cost of a Medicare Advantage plan depends on a range of factors. Some plans charge a monthly premium, but not all do. Some also have a deductible, but not all. The plan might also charge a copayment or coinsurance each time you see a doctor or receive treatment.

Some Medicare Part C plans will pay for your Part B premium. Others also limit the doctors you can see or charge you more out-of-pocket expenses if you see a doctor or provider outside the plan’s network.

What Is the Difference Between Medicare Advantage and Medigap?

A notable difference between Medicare Advantage or Part C plans and Medigap supplemental insurance plans is the amount of variation found between each. The federal government standardizes Medigap plans. If you buy Medigap Plan A, you will get the same coverage whether you purchase it from Company A or Company B. Meanwhile, the coverage offered by a Medicare Advantage plan from Company A can be considerably different from the Medicare Advantage plan offered by Company B.

What Are the Benefits of Supplemental Medicare Insurance?

Getting supplement medicare insurance coverage is beneficial for many reasons:

1. Reduces Out-of-Pocket Expenses

The out-of-pocket expenses under Medicare are more than most people can comfortably afford. As the need for medical attention grows with age, medical expenses continue to rise. Yet, Medicare excludes services, making it crucial to get Medigap. Medigap coverage can fill in gaps in your coverage. It can help you cover expenses such as copayments, coinsurance and deductibles. Other Medigap policies also extend coverage to those excluded under Original Medicare.

2. Access to Health Care Providers

Medigap maintains the greatest access to health care providers. It lets you choose doctors who accept Medicare without needing referrals or networks. You can consult a specialist directly without approval from a primary care physician. This feature makes switching doctors and getting quality health care services easier. It allows you to receive treatment from professionals you trust.

3. Predictable Costs

Supplemental Medicare Insurance coverage helps you budget for health care costs more effectively. With enhanced predictability, you can estimate your out-of-pocket expenses. This can be advantageous during retirement.

4. Automatic Renewal

As long as you pay your premiums, the Medigap policy should renew automatically. The insurance company cannot cancel the policy, so you can enjoy the benefits at any time. There is some assurance that renewing is almost always guaranteed.

5. Access to Travel Coverage

Some Medigap plans offer coverage for emergency health care services when you travel abroad. This feature could be vital if you plan to spend time outside the U.S., especially during retirement.

6. Peace of Mind

Knowing you have additional coverage beyond what Original Medicare providers can give you peace of mind. It reduces the financial uncertainty and worry associated with health care costs in retirement.

How to Choose the Right Supplemental Medicare Coverage

There are several factors to consider when choosing the ideal supplemental medicare coverage. Here are seven crucial examples:

1. Learn About the Available Coverage

Medigap plans have different benefits depending on the plan. It’s essential to determine what your plan will cover before selecting it. Medigap plans are standardized. Each one offers the same benefits no matter what insurance provider you choose. However, some insurers are selective in the plans they provide.

2. Assess Your Needs

Consider your current and future health needs before selecting a plan. Are you expecting frequent medical services or prescriptions? Assessing your needs helps you determine which benefits are best suited.

3. Compare Costs

Compare costs of premiums, deductibles and other related expenses. Then, assess how much you’ll likely pay now and in the future to access the necessary medical services. It would also be ideal to check what the annual limits are on the out-of-pocket expenses for medical services.

Certain Medigap plans, notably Plan K and Plan L, have added out-of-pocket limits. While others have limits built into the plan. If you meet the limit set by either plan and pay your Part B deductible, the plan will cover the remainder of your costs for the year. Remember that some Medigap plans offer full coverage for certain costs while others might pay half or three-quarters of the expense. So it helps to get a good idea of the financial situation.

4. Confirm the Availability of Doctors

Most doctors are selective in terms of the coverage they accept. It’s essential to check those who are in your network. You may want to consider proximity and availability to take full advantage of their services. The purpose is to ensure you get quality and convenient medical services.

While most care providers participate in the Medicare program, it’s still best to double-check. Your current doctor will likely accept Medicare, but others may not. This situation makes it challenging to find a new doctor, although it is simpler when you have Medigap.

5. Review Other Coverage You Have

Although 65 is the traditional retirement age, plenty of people are still employed at that age and continue to work for years. If you are covered by an insurance plan from your employer or by a plan from your spouse’s employer, it’s a good idea to speak with the administrator of that plan to see how enrolling in Medicare will affect your coverage under it. If you already have a secondary insurance policy, you might not need Medigap.

6. Research Insurers

Look into the reputation of the insurance companies offering Medigap plans. You want an insurance provider that is reliable and transparent. Also, the insurance provider should have excellent customer service. A responsive provider dedicated to answering your questions can go a long way. Medical insurance can be complex, so you’ll likely have much to ask.

7. Consult With a Professional

If you’re unsure which Medigap plan is right for you, consider speaking with a Medicare professional. Consultants, insurance brokers and financial advisors with knowledge of Medicare and Medigap can provide tailored advice based on your circumstances.

Why Do You Need a Professional When Choosing a Medigap Plan?

Consulting with a professional when choosing a Medigap plan can be beneficial for several reasons:

1. No additional Costs

You get the same price when you buy a plan through a Broker as if you do all the work on your own. It is illegal for an Insurance Agent to add a fee or charge a higher price for Health Insurance.

2. Expertise

Professionals like health insurance agencies understand the Medigap plans. You can leverage their knowledge and experience to navigate the complexities of Medicare. This strategy can help you make informed decisions.

3. Personalized Advice

Professionals can assess your circumstances, such as your health needs, budget and preferences and recommend the Medigap plan that best suits your situation. They can help you tailor your coverage to ensure an ideal plan for your needs.

4. Clarification of Options

Professionals can explain the nuances and details of Medicare and Medigap. They can clarify the differences between plans, including coverage costs, exclusions and restrictions. This insight helps make it easier to understand your options.

5. Assistance With Enrollment

Professionals can assist you throughout the enrollment process. They can ensure you complete the necessary steps correctly and efficiently. For example, they can help you understand the deadlines and requirements to avoid potential issues.

6. Updates and Changes

Medicare and Medigap rule changes over time. Partnering with professionals ensures you are up-to-date. Insurance agencies often provide regular updates and information to help you stay current.

Supplemental Insurance FAQs

Below are some frequently asked questions:

1. Do You Need to Have Supplemental Insurance With Medicare?

While optional, purchasing supplemental Medicare insurance helps you cover out-of-pocket costs and gaps in Medicare coverage. It provides financial protection for coinsurance, deductibles and other medical expenses.

Medicare Part A has a deductible that you pay before the benefits for in-patient care kick in. You may also incur costs on copays and coinsurance, which can be significant if you use a lot of health care. Medicare Parts A and B do not have maximum out-of-pocket limits as other kinds of insurance, meaning there are no caps on what you could owe as coinsurance and copays add up. Medigap is one way to limit the annual expenses.

2. Who Would Benefit From Supplemental Insurance?

Supplemental medical insurance is ideal for anyone who anticipates needing frequent medical services. Individuals with high health care costs can leverage Medigap to cover the copayments, coinsurance and deductibles that Original Medicare doesn’t cover. Persons on fixed incomes who may find it challenging to manage unexpected health care expenses can benefit from Medigap, providing financial protection and predictability. Medigap fills the gaps in Original Medicare, providing comprehensive coverage to beneficiaries. Beneficiaries who travel often can also purchase supplemental insurance to cover the cost of emergency care.

3. What Does Supplemental Medicare Insurance Cover?

Medigap pays toward out-of-pocket costs associated with Original Medicare, including:

1. Medicare Parts A and B deductibles
2. Copays
3. Coinsurance
4. Hospital costs

Some supplemental medicare insurance coverage also caters to services like emergency treatment if abroad. However, you will still need additional medical insurance to cover the following:

1. Vision and dental care
2. Hearing aid
3. Long-term care facilities
4. Hiring a private nurse

If you take prescriptions, you need to sign up for a separate Medicare drug plan — post-2005 Part D Medicare plans don’t include coverage for prescription medications.

4. When Can You Get Supplemental Insurance?

You may be able to secure a Medicare supplemental insurance plan during the seven-month Medicare Initial Enrollment Period and get guaranteed acceptance. This window starts three months before the first day of the month you turn 65. However, if you happen to be born on the first, your Medicare will start one month earlier than your birth month and the enrollment period moves forward one month as well. Once you have Medicare, you can apply for a Supplement at any time, but you will likely have to go through medical underwriting and could be denied if you have serious preexisting health conditions.

Let Health for California Help You Choose Your Plan

If you’re nearing 65 or have recently become eligible for Medicare and live in California, Health for California can help you sift through your supplemental insurance options. We’ll help you choose the plan that best meets your needs, whether it’s getting a Medicare Advantage plan, getting Original Medicare with a Medigap plan or getting prescription drug coverage. We want you to get the coverage you need at a price suitable for your budget.

Get a quote today for quality health insurance at a low price.