Medicare supplement plans, also known as Medigap, can be beneficial coverage in Medicare management, whether it’s for specific health needs or international travelers. As with most things regarding Medicare, you have to follow specific rules to maximize your coverage options. The team at Blue Cross and Blue Shield of Kansas is committed to cutting through the confusion and offering simple, transparent information about healthcare for those 65 and older.
What Is Medicare Supplement Plan
A Medicare supplement plan is also called Medigap because it fills “gaps” in coverage for Original Medicare. The terms are used interchangeably. Supplemental coverage is sold by private insurers, not the federal government.
Not everyone needs to get a Medicare Supplement plan, but everyone should consider the benefits before making a final decision. Here are a few simple points to remember with Medicare supplement plans:
- You can only get a Medigap policy if you have Original Medicare.
- You cannot get a Medicare Supplement policy if you use a Medicare Advantage Plan.
- You can get a Medicare Supplement Plan if you have pre-existing conditions and apply during the correct open enrollment period.
It’s important to note that Supplemental Plans are person-specific. If one spouse has health issues that would benefit from a Medicare Supplement plan, there is no requirement for a healthier spouse to get coverage. There is no option for coverage as a couple.
Examples of Medicare Supplement Coverage
Examples of coverage “gaps” from Medicare Supplement Plans include:
- Medicare Part A coinsurance covers up to a year beyond Medicare Part A coverage limits
- Medicare Part B coinsurance or copayment
- Medicare Part A or B Deductible
- International Travel Coverage
- Coinsurance for skilled nursing facility
Coinsurance vs. Premium vs. Deductible
Knowing the terms associated with your money is helpful when navigating Medicare.
The premium is what you pay each month whether you use the coverage or not. The deductible is how much you have to pay out of pocket before Medicare coverage starts paying. Coinsurance is the percentage of the remaining costs that you pay.
TOBACCO USERS: Another financial consideration is for tobacco users. While Original Medicare premiums are the same for everyone regardless of tobacco use, the Medigap policy will have a higher premium for tobacco users. Part B recipients do get coverage of eight tobacco-cessation counseling sessions each year.
Most Popular Medicare Supplement Standardized Plans
Standardized Medicare Plans are named by letters. This can be confusing because there is Medicare Supplement Plan B, which isn’t the same as Medicare Part B. Blue Cross and Blue Shield of Kansas offer five of the 10 standardized plans available to all enrollees during Medicare Supplement Open Enrollment.
- Plan A: The most basic plan, including Medicare Part A & B Coinsurance
- Plan G: All Plan A benefits, with Medicare Part A & B deductible coverage. This is the Second most popular plan covering 27% of Medigap recipients
- Plan K: Most budget-friendly plan
- Plan L: A little bit more coverage than Plan K, with a slightly higher—yet still budget-friendly—premium
- Plan N: Third most popular plan covering 10% of recipients
Plans C and F are only available if you enrolled in Original Medicare before January 1, 2020. Even though Plan F is the most popular Medicare Plan, it’s not available to first-time enrollees in 2023.
When Does Medicare Supplement Open Enrollment Take Place?
Take note of the different timelines for Medicare Supplement vs Medicare coverage, even during the first enrollment opportunity.
Medicare Supplement Open Enrollment does not run parallel with the annual Medicare Enrollment Period (AEP). Even the initial enrollment for supplemental coverage doesn’t run in tandem with Medicare’s Initial Enrollment Period.
You become eligible for Medicare Supplement Plans in the first month you turn 65, and you have Medicare Part B. That period runs for six months from your first day of eligibility. That date will be listed on your Medicare Card.
Since some eligible Part B people will still be covered under employer health plans, the Supplemental Plan Open Enrollment won’t begin until the person who is 65 or older is receiving Part B benefits. You cannot get a Medicare Supplement Plan if you aren’t enrolled in Medicare Part B.
Supplemental Medicare Plan for Disabled Medicare Recipients
Those who get disability coverage through Medicare will also get the same six-month period that goes into effect the day Medicare Part B kicks in. It’s important to remember that those collecting disability through Social Security have a 24-month waiting period before they are Medicare eligible.
Delaying Supplemental Medicare Plan Coverage
During the Medicare Supplement Open Enrollment period, you can get supplemental coverage regardless of your health conditions. If you delay Medicare Supplement coverage, you are not guaranteed coverage if you have pre-existing conditions. As a bonus, healthy beneficiaries will pay the same rate as those with health conditions.
After six months, and that date is firm, policy providers can require medical underwriting to decide if you’ll be allowed to pay for a plan and how much that premium will be each month.
Medicare Supplement Plan Guaranteed Issue Right
Another term to become familiar with is “Guaranteed Issue Rights.” This means you have a right to coverage, regardless of health conditions, beyond the traditional “65 and Part B recipient” rule.
GUARANTEED ISSUE RIGHT DEFINTION: “Rights you have in certain situations when insurance companies are required by law to sell or offer you a Medicare Supplement policy. In these situations, an insurance company can’t deny you a Medicare Supplement policy, or place conditions on a Medicare Supplement policy, like exclusions for pre-existing conditions, and can’t charge you more for a Medicare Supplement policy because of a past or present health problem.”
This right is usually prompted by a sudden loss of coverage in a private employer healthcare plan or other extenuating circumstances.
Medicare Supplement Plan and Medicare Advantage
Since Medicare Advantage, often referred to as Part C, covers many of the gaps and expands the coverage of Original Medicare, you don’t need a Medicare Supplement and Medicare Advantage Plan. Moreover, it’s illegal for a vendor to sell you a Medicare Supplement plan if you’re getting Medicare Advantage Coverage.
Under the Guaranteed Issue Rights, if you decline Medicare Supplement enrollment or enroll and then ditch Medicare Supplement for a Medicare Advantage plan, you generally have one year to change your mind and go back to Medicare Supplement with the same inclusive enrollment option.
IMPORTANT: Do not go more than 63 days between Medicare Advantage coverage and Medicare Supplement coverage, or else you’ll lose the Guaranteed Issue Rights.
Medicare vs. Medicare Supplement Coverage: What Pays First?
When you have Original Medicare and a Medicare Supplement policy, your healthcare costs will first be paid by Original Medicare up to the limits of coverage. That’s when the Medicare Supplement policy will take over coverage amounts.
Supplemental Plans can also pick up coverage when the benefits of Original Medicare expire, such as an extended hospital stay.
Can I Change Medicare Supplement Plans Anytime?
Outside of the six-month Medicare Supplement Plan Enrollment Period, you can change Medicare Supplement plans at any time. Just because you can change it doesn’t mean you should. Once that six-month window expires, you’ll be subject to the same medical underwriting possibility and a potentially higher premium.
All Medicare Supplement plans come with a 30-day “Free Look” period, where you can try out a new Medicare Supplement policy without losing coverage of your current policy. It’s not “free” of costs, as you’ll pay both premiums, but it’s “freedom” to try more plans. Even with the “Free Look,” you are subject to medical underwriting if you don’t try plans on for size during that six-month enrollment period.
Before you switch Medicare Supplement policies, consider this:
- Do I qualify for a Guaranteed Issue Rights exception?
- Can I go six months without supplemental coverage for the benefits of the new Medicare Supplement policy to begin?
- Would a Medicare Advantage Plan be a better option?
Once you let go of a Medicare Supplement policy and premium, you likely won’t get the same benefits back. You certainly won’t be guaranteed any coverage, barring those Guaranteed Issue Rights.
Best Medicare Supplement Plan for Travelers
Some retirees want to spend their golden years traveling the world or taking an international cruise. Original Medicare doesn’t cover overseas healthcare costs except in specific extenuating circumstances. You will be responsible for 100% of all healthcare needs overseas. A Medicare Supplement Plan can pick up this coverage.
Plans N, C, and F offered by Blue Cross and Blue Shield of Kansas offer Foreign Travel Emergency Coverage.
Disadvantages of a Medicare Supplement Plan
Medicare Supplement Plans aren’t for everyone. One of the main drawbacks is the assumption that a Medicare Supplement plan will cover the gaps in dental or vision care, which isn’t the case. You’re more likely to find those benefits in a Medicare Advantage Plan.
Other drawbacks include:
- Another Premium: In addition to the premiums being paid on the other parts of Medicare, this adds another monthly payment.
- No Prescription Coverage: Even the best Medicare Supplement plans won’t cover prescription drugs. You’ll need a Medicare Part D or Medicare Advantage Plan for that.
What Is the Best Supplemental Insurance for Medicare?
This is why you need an expert team like Blue Cross and Blue Shield of Kansas to help you through the process because each person will have specific coverage needs. Call us now at 1-866-647-6705 to review your options, premiums, and specific circumstances. We’ll take all the time you need to get the right coverage.