Jane Dotson
Medicare is a health insurance program for individuals aged 65 and above, or those with disabilities or ESRD. It is primarily divided into two parts: Part A (Hospital Insurance) and Part B (Medical Insurance). While Part A is usually free, Part B requires a premium to be paid. Medicare Supplement Insurance, or Medigap, is an additional insurance policy that can be purchased to cover out-of-pocket costs not covered by Original Medicare. When deciding on Medigap, it is important to consider factors such as eligibility, cost, and the specific benefits offered by each plan, as they vary across states and insurance companies.
| Characteristics | Values |
|---|---|
| What is Medicare Supplement Insurance (Medigap)? | Extra insurance bought from a private company to help pay your share of costs in Original Medicare. |
| Who can buy it? | Generally, you need Part A and Part B to buy a Medigap policy. If you're under 65, you might not be able to buy a Medigap policy or may have to pay more. Federal law generally doesn't require insurance companies to sell Medigap policies to people under 65, but some states offer this. |
| What does it cover? | Medigap policies generally don't cover long-term care, vision, dental, hearing aids, private-duty nursing, or prescription drugs. Some Medigap policies offer coverage when you travel outside the U.S. |
| How to buy? | You can buy any Medigap policy sold in your state. Insurance companies cannot use medical underwriting to decide whether to accept your application. Your Medigap Open Enrollment Period is a one-time enrollment period. |
| Other coverage options | You may have other coverage, like employer or union, military, or veterans' benefits. You can also choose Medicare Advantage, which includes Part D coverage in most cases. |
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What You'll Learn
Understanding Medicare Part A and Part B
Medicare is a federal health insurance program for individuals aged 65 and older and some individuals under 65 with certain disabilities or conditions. Medicare Part A and Part B are the two components of Original Medicare, which is one of the two main ways to receive Medicare coverage. The other way is through Medicare Advantage, which is a Medicare-approved plan from a private company that offers an alternative to Original Medicare.
Medicare Part A is hospital insurance that helps cover inpatient care in hospitals, skilled nursing facility care, hospice care, and home health care. Most people get Part A for free, but some have to pay a premium for this coverage. To be eligible for premium-free Part A, an individual must meet certain requirements, such as having worked a specified number of quarters under Social Security or the Railroad Retirement Board (RRB) or being the spouse or dependent child of someone who has.
Medicare Part B, on the other hand, is medical insurance. Individuals who receive monthly Social Security or RRB benefits at least four months before turning 65 are automatically entitled to premium-free Part A and must file an application to enroll in Part B. Those who do not receive these benefits must file an application for Medicare Part B with the Social Security Administration. To keep premium Part A, individuals must continue to pay monthly premiums and stay enrolled in Part B.
After enrolling in Original Medicare, individuals can choose to add drug coverage through a separate Medicare drug plan (Part D). Part D helps cover the cost of prescription drugs, including many recommended shots or vaccines. It is available to everyone with Medicare, and most Medicare Advantage Plans include Part D coverage. Additionally, individuals can purchase Medicare Supplement Insurance (Medigap) from a private company to help pay their share of costs in Original Medicare. However, Medigap policies generally do not cover long-term care, vision, dental, hearing aids, private-duty nursing, or prescription drugs.
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Supplemental insurance options
There are several supplemental insurance options available to those with Medicare coverage. Firstly, Medicare Supplement Insurance, also known as Medigap, is extra insurance you can purchase from a private health insurance company to help pay your share of out-of-pocket costs in Original Medicare. Generally, you must have Original Medicare, including Part A (Hospital Insurance) and Part B (Medical Insurance), to buy a Medigap policy. Medigap policies are standardized and named by letters in most states, such as Plan G or Plan K. The benefits offered by each lettered plan are the same across insurance companies, with the price being the only differentiating factor. It is important to note that Medigap policies typically do not cover long-term care, vision, dental, hearing aids, private-duty nursing, or prescription drugs. Additionally, if you are under 65, there may be restrictions or higher costs associated with purchasing a Medigap policy.
Another option for supplemental coverage is to explore coverage from a former employer or union, or through Medicaid. These options can provide additional support in covering your share of costs in Original Medicare.
When considering supplemental insurance options, it is important to review the specific plans and their benefits. For example, Plan N covers 100% of the costs of Part B services, except for copayments for certain office and emergency room visits. Similarly, Plans K and L outline how much they will contribute towards approved services before you meet your out-of-pocket yearly limit and Part B deductible. After meeting these limits, the plans may cover 100% of the approved service costs. Plans F and G also offer a high-deductible option in certain states.
It is worth noting that Plan C and Plan F are not available if you turned 65 on or after January 1, 2020, or for certain individuals under the age of 65. However, if you were eligible for Medicare before this date but not yet enrolled, you may still be able to access these plans.
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How Medicare works with other insurance
When you have more than one insurance payer, there are rules to decide who pays first. This is called the coordination of benefits. The "primary payer" pays what it owes on your bills first, and the remaining amount is sent to the second or "secondary payer". The secondary payer only pays if there are costs that the first payer didn't cover.
If your client is 65 or older and has group health plan coverage based on their or their spouse's current employment status, the number of employees in the company determines who pays first. If the employer has 20 or more employees, the group health plan pays first, and Medicare pays second. If the employer has less than 20 employees, Medicare pays first, and the group plan pays second.
If Medicare is the primary payer and your employer is the secondary payer, you'll need to join Medicare Part B (medical coverage) before your employer insurance will pay for Part B services.
Medicare Supplement Insurance (Medigap) is extra insurance you can buy from a private company that helps pay your share of costs in Original Medicare. Medigap policies do not typically cover long-term care, vision, dental, hearing aids, private-duty nursing, or prescription drugs.
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Eligibility for premium-free Medicare
Medicare Part A, also known as hospital insurance, covers most medically necessary inpatient care, skilled nursing facility (SNF) care, home health care, and hospice care. Most people get Part A for free, but some have to pay a premium for this coverage.
To be eligible for premium-free Part A, an individual must be entitled to receive Medicare based on their own earnings or those of a spouse, parent, or child. The worker must have a specified number of quarters of coverage (QCs) and file an application for Social Security or Railroad Retirement Board (RRB) benefits. The exact number of QCs required depends on whether the person is filing for Part A based on age, disability, or End-Stage Renal Disease (ESRD).
If you are receiving monthly Social Security or RRB benefits at least four months before turning 65, you do not need to file a separate application to become entitled to premium-free Part A. In this case, you will get Part A automatically at age 65. If you are not receiving monthly Social Security or RRB benefits, you must file an application for Medicare by contacting the Social Security Administration. Part A coverage begins the month the individual turns 65, provided they file an application for Part A or Social Security/RRB benefits within six months of turning 65.
You may also be eligible for premium-free Part A if you receive regular dialysis treatments or a kidney transplant, have filed an application for Medicare, and meet one of the following conditions:
- You have worked the required amount of time under Social Security, RRB, or as a government employee.
- You are getting or are eligible for Social Security or RRB benefits.
- You are the spouse or dependent child of a person who has worked the required amount of time under Social Security, RRB, or as a government employee, or you are getting Social Security or RRB benefits.
If your income is low, you may be eligible for the Qualified Medicare Beneficiary (QMB) program, which pays for your Medicare Part A and B premiums and other costs.
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How to buy, switch, or drop a policy
If you're looking to buy a Medigap policy, you can purchase any Medigap plan that is sold in your state. It is important to note that federal law generally doesn't require insurance companies to sell Medigap policies to people under 65, although some states offer this. Check with your State Insurance Department about your rights under state law.
When buying a Medigap policy, you have the right to choose any plan offered by an insurance company in your state or the state you're moving to. You can buy a standardized Medigap policy from your current insurance company, as long as it offers the same or fewer benefits. If you've had your Medicare SELECT policy for over six months, you won't have to answer any medical questions.
To switch your Medigap policy, you typically need to be within your 6-month Medigap Open Enrollment Period, except in specific situations where you have a guaranteed issue right. These rights include instances where your insurer goes bankrupt, or you move to a place not covered by your Advantage plan. If you buy a new Medigap policy, remember to cancel your old one, except during your 30-day "free look period." During this period, you can decide whether to keep your new policy before cancelling the old one.
If you wish to drop your Medigap policy, simply contact your insurance company to cancel it. Keep in mind that once you cancel your policy, you cannot get it back, and it may offer coverage not available in newer policies.
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Frequently asked questions
Medicare Supplement Insurance (Medigap) is extra insurance that can be purchased from a private company to help pay your share of costs in Original Medicare.
Generally, you must have Original Medicare Part A and Part B to buy a Medigap policy. If you are under 65, you may not be eligible to purchase a Medigap policy, or you may have to pay more.
Medigap policies typically cover costs when travelling outside the U.S. However, they usually do not cover long-term care, vision, dental, hearing aids, private-duty nursing, or prescription drugs.
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