If you’re getting ready to retire and turn 65, you may wonder, what are Medicare Supplement plans and do I need one? This is a common question I’ve had to answer hundreds if not over a thousand times.
What Are Medicare Supplement Plans?
Medicare Supplement plans are sold by private health insurance companies and help cover the gaps left over from Original Medicare. Original Medicare is made of Part A, hospital insurance, and Part B, medical insurance. To enroll in a Medicare Supplement plan you will need to be enrolled in both Medicare Part A and Part B.
The great thing about Medicare Supplement plans is that they are standardized. This means that each carrier has to give you the same coverage for the plan that you choose. So, if you choose Medigap Plan G, the coverage is the same, regardless of which Medigap health insurance company you have your coverage with.
The other great thing about Medicare Supplement plans is that they are guaranteed renewable. This means that if your health changes, you can’t lose your coverage as long as you are paying the monthly premiums.
When Should You Sign up for a Medicare Supplement Plan?
When you are first eligible for Medicare, you have a seven-month Initial Enrollment Period to sign up for Original Medicare A & B. For most people this period starts 3 months before the month they turn 65, includes their birth month, and lasts for 3 months after the month they turn 65.
What a lot of people don’t know is that Medigap (Medicare Supplements) offers you a 6-month Open Enrollment Period as well. However, it is different than your Initial Enrollment Period.
The Medigap Open Enrollment Period lasts for 6 months and it starts the month you turn 65. So for example, if your birthday is in March, your Medigap Open Enrollment period will last through August.
During the Medigap Open Enrollment Period health insurance companies can’t deny you coverage based on your health. However, if you are outside of your Medigap Open Enrollment Period and you don’t have Guaranteed Issue Rights, you may have to go through medical underwriting to qualify for coverage. This is why the Medigap Open Enrollment Period is so important.
How Much are Medicare Supplement Plans?
Also, keep in mind, that Part B has a monthly premium. If you choose a Medigap plan, you will have an additional monthly premium that you pay to the Medigap carrier.
The cost of Medicare Supplement plans varies depending on several different factors including:
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- Location: Medicare Supplement (Medigap) rates vary by where you live. Someone purchasing a Medigap plan G in Minnesota will pay a different rate than someone purchasing a Medigap plan in New Jersey.
- Age: Medicare Supplement plans have three different rate classes, community, issue age, and attained age. Some states offer all three rates but others have only one rate option.
- Gender: Your gender could also be a factor in what your Medicare Supplement rate will be.
- Tobacco Status: If you are a tobacco user, you will most likely pay more for your Medicare Supplement than a non-tobacco user.
Medicare Supplement vs Medicare Advantage
You cannot have a Medicare Supplement and a Medicare Advantage at the same time. Again, Medicare Supplements cover the gaps left over from Original Medicare A & B.
A Medicare Advantage plan is an alternative way to receive your Medicare benefits through a private health insurance plan, usually as an HMO or PPO.
If you have other questions about Medicare, Medicare Supplements, or Medicare Advantage, I’d be happy to answer any questions that you may have. You can book a call with me at any time using the link at the top of the page.