When it comes to your options with Medicare health plans, Medicare Supplement Plans, commonly referred to as Medigap plans, could arguably be considered the best option for health care coverage. But what exactly is a Medicare Supplement (Medigap) plan?
A Medicare Supplement Plan is a health insurance policy provided by a private insurance company. Supplement Plans are referred to as Medigap Plans, as they are designed to fill in the “GAPS” within original Medicare.
Think of a buffet style restaurant. You pay one set price, and for that one price you can eat all the food you desire while you are there. You can not eat anything you want from the restaurant next door to the buffet. You can only eat what that buffet covers. If you want to add a beverage while you are there, you pay extra. The buffet structure is how Medicare Supplement Plans work. With a Medicare Supplement you pay a set monthly premium. For that premium you can have any medically necessary services provided to you anywhere in the country with providers who accept Medicare. Hence the nickname, Medigap, you are paying a company to cover the gaps that Original Medicare, Parts A & B, leave a Medicare consumer responsible for.
Not all Medicare Supplement Plans cover all the out-of-pocket costs. The buffet example is to help you understand the concept of these plans. What is an example of a gap in Medicare a consumer would be responsible for? The Part A Hospital Deductible is a great example. Under Medicare, if you were to be hospitalized, you are responsible for a deductible of $1,484. This is an example of a gap the Medicare Supplement policy would cover. You are paying a set monthly price to the insurance company so that if you were to be hospitalized as an inpatient, your Medicare Supplement pays your Part A deductible. Another example is the Part B copay or coinsurance. Under Medicare Part B, you the consumer pay 20% of the cost for Medical expenses. Medicare, aka the government, pays 80% of the cost. This leaves you the consumer with a gap of 20% you are responsible for under Medicare. When you elect to go with a Medicare Supplement plan, you are paying a set monthly premium to an insurance company so that they cover your Part B 20% “GAP.”
In the buffet example I stated if you wanted a beverage you would pay extra. That is an example of a Prescription Drug Plan, as it relates to a Medicare Supplement Plan. Medicare Supplements do not cover Prescription Drugs. Commonly when someone chooses to go with a Medicare Supplement as their Medicare health plan, they usually will add a Prescription Plan to cover their medications. The addition of this drug plan is an extra premium per month.
Electing to go with a Medicare Supplement Plan will cost a Medicare consumer more per month then the alternative option of a Medicare Advantage health plan. The big difference being that with a Medicare Supplement Plan you are pre-paying your health costs with the monthly premium. There are Medicare Supplement Plan options where you only pay the premium and nothing more. This is referred to as Plan F. (The Cadillac Plan) While there is a monthly premium, it does not matter how sick one was to get each year, the Medicare Supplement can not drop the client and it will cover their out-of-pocket costs.
Feedback from our clients have indicated the top 2 reasons they selected the Supplement Plan as their choice was COST CONTROL and EASE OF ACCESS. With a Medicare Supplement you know exactly what your year will cost when it comes to health insurance. This allows seniors on a Social Security budget to plan accordingly. Medicare Supplements do not have a network. You can see any doctor across the United States that accepts Medicare. You do not need referrals, and you do not need to have an established primary care doctor. It is the least amount of red tape and the most freedom someone will have with health insurance.
There are not a one size fits all plan when it comes to Medicare. Consumers shop plans for many different reasons. Just because your spouse, co-worker, or neighbor has one plan with one company, it does not mean that plan is the right fit for you. Sitting down with Insurance Simplified to evaluate your plan and/or your options for a future plan, puts you in the driver seat and allows you to identify the correct plan for your needs and wants.