What you don’t know about Medicare supplements (Medigap) or Medicare Advantage plans could cost you dearly. The system is rigged in favor of Medicare insurers, and consumers often have little idea what they will need or be able to afford. Here are a few tips:
Which is right for you? Medigap policies tend to have have higher premiums, but pay most of your out-of-pocket costs, so your costs stay more consistent and predictable. You are also free to use any healthcare provider that accepts Medicare. If you choose Medigap you will also need to enroll in a separate Part D prescription drug plan. Medicare Advantage plans tend to have lower premiums and include drug coverage, but you will have deductibles, as well as co-pays and cost sharing for most services. Hospitalizations could be costly. Many Medicare Advantage plans are managed care and require that you use participating providers to receive reimbursement for your care.
Your guaranteed issue rights for Medigap. If you want to purchase a Medigap policy, you need to do so during your Initial Enrollment Period. If you miss your Initial Enrollment Period, Medigap supplemental insurers can impose 6 - month waiting periods for pre-existing conditions that can leave you footing the bills until your coverage finally kicks in. On the other hand all Medicare Advantage plans offer guarantee issue rights, without exclusions or higher costs for pre-existing conditions or age during Medicare’s fall annual enrollment periods.
Which Medigap plan is best for you? To learn about Medigap plans and the coverage they offer you can find a chart comparing the coverage of plans A through N in the “2016 Medicare & You” publication on page 101. You can download a copy online at www.Medicare.gov or call 1-800-Medicare (1-800-633-4227) to request a copy.
Where to find premium information. Rather than calling insurance agencies for quotes, first visit the website of your state insurance commission and look for a publication listing all the state-approved Medigap insurers and Medigap plans (A through N) sold in your state. The information includes the insurer’s company name, phone number and website address, and more crucially, the current premiums for the plans (A through N). Since all insurers are required to cover the same benefits under specific plans (A through N) then all you need to do is select the plan covering the benefits you are interested in (such as Plan F), then find a good insurer with the lowest premium for the plan you are shopping for. Not all states have all plans. Calls to the insurer are necessary to confirm premium quotes for your zip code. For Part D Plans, or Medicare Advantage plans, use the health and drug plan finder on the Medicare website at www.Medicare.gov. It’s important to select those plans by selecting the lowest-costing plan based on the prescriptions you currently take.