Medicare Supplement Insurance (Medigap)
Medicare supplement insurance helps you pay for the out of pocket expenses for your health care.
It is also called Medigap insurance because it helps you fill the gap between what Medicare covers and the costs you are responsible for under original Medicare.
Help With Original Medicare Costs
Medicare supplement insurance is optional. You are not required to purchase it.
In fact, Medicare supplement insurance is only available when you enroll in original Medicare (Medicare Part A and Medicare Part B). If you purchase a Medicare Advantage plan (Medicare Part C), it is illegal for a Medigap carrier to sell you a Medicare Supplement policy.
Medicare supplement insurance does not add new benefits to your Medicare coverage. It helps you pay for the deductibles and cost-sharing associated with Medicare Part A and Part B.
Medicare supplement insurance comes from private insurance companies that are regulated by each state. Medicare has standardized plans available across the country. There are 3 states (Massachusetts, Minnesota and Wisconsin) that do not follow the nationally standardized plans.
Each Medigap plan has a letter (A through N) and each letter plan covers the same benefits. However, each company can set their own price for their Medicare supplement plan. The only difference between plans is how much they charge for premiums. Currently, carriers are allowed to offer plans A, B, C, D, F, G, K, L, M and N. Plans E, H, I and J are grandfathered plans. That means you can still keep your plan as long as you pay your premium but you cannot purchase a new plan of that letter.
Medigap & MACRA
Medicare beneficiaries who are eligible for Medicare after January 1, 2020 will not be able to purchase a Medicare Supplement Plan C or Plan F. This is due to the provision of MACRA that prohibits plans with “first dollar coverage”. Since plans C and F cover the Part B deductible, they are not allowed to be sold to new Medicare Beneficiaries after Jan 1, 2020. Plan C and Plan F are not going away however. If you are eligible for Medicare prior to January 1, 2020, you will still be able to purchase a Medicare supplement Plan C or Plan F if you can pass the Medical underwriting requirements.]
Medicare & Long-Term Care
Your Medicare benefits don’t cover all of the medical care you may require.
Medicare helps you pay for short-term medical care when your doctor expects your condition to improve. It does not cover long-term care when your situation is not expected to improve.
When you require long-term care, Medicare will not help you. There is private insurance that can help with your medical expenses for long-term care. You can also pay for your own care in a long term care facility as well. Both of the these are very expensive options. If you do not have the funds for long term care, you may qualify for Medicaid. Medicaid pays for approximately 70% of all long term care in the United States.
Medicare & The Affordable Care Act
The Patient Protection and Affordable Care Act (ACA), commonly called ObamaCare, is a healthcare program for those under 65 that helps US citizens receive more affordable health care. It makes new services available and changes the existing rules for private insurance companies.
ACA Impact On Medicare
The Affordable Care Act doesn’t change your Medicare coverage. In fact, the Affordable Care Act makes your Medicare benefits better by providing you with:
- More preventative services at no cost.
- More savings on brand name prescription drugs.
- Your doctor gets more support to ensure that your treatments are consistent.
Whether you have original Medicare (Medicare Part A and Medicare Part B), or you have Medicare Advantage (Medicare Part C), you have health insurance. You don’t need to do anything. Your Medicare coverage is considered “Credible Coverage” and meets the minimum essential requirements for health insurance under federal ACA guidelines.
We’ve covered the basics of Medicare. Next, let’s talk about Medicare eligibility.