What is the difference between Medicare Supplemental Insurance (Medigap) and Medicare Advantage Plans? If you would like to understand how the different parts of Medicare work together schedule a private telephone discussion or attend one of our Medicare Educational Meetings. We will go over Part A, Part B, Part C, Part D and Medicare Supplement Insurance (Medigap) Plans. After the discussion you will have a better understanding of how Medicare works and how to make an informative choice.
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Original Medicare which is administered directly by the federal government has two parts:
Part A (Hospital Insurance)
Part A has deductibles and co pays, it does cover most medically necessary hospital, skilled nursing facility, home health and hospice care. If you have worked and paid Social Security taxes for at least 40 calendar quarters (10 years) you will not have a premium.
Part B (Medical Insurance)
Part B has deductible and co pays, it covers 80% of most medically necessary doctors’ services, preventive care, durable medical equipment, hospital outpatient services, laboratory tests, x-rays, mental health care, and some home health and ambulance services. You pay a monthly premium for this coverage.
If you are still working or need to apply for Original Medicare On-line the web site to apply is: https://secure.ssa.gov/iClaim/rib It does have a short video to show you how to apply.
Medicare Advantage Plans
A type of Medicare health plan offered by a private company that contracts with Medicare to provide you with all your Part A and Part B benefits. Medicare Advantage Plans include Health Maintenance Organizations, Preferred Provider Organizations, Private Fee-for-Service Plans, Special Needs Plans, and Medicare Medical Savings Account Plans. If you’re enrolled in a Medicare Advantage Plan, most Medicare services are covered through the plan and aren’t paid for under Original Medicare. Most Medicare Advantage Plans offer prescription drug coverage. You can learn more about Medicare Part C here.
Medicare Part D (outpatient Prescription Drug Insurance)
Medicare offers prescription drug coverage to everyone with Medicare. If you decide not to get Medicare drug coverage when you’re first eligible, you’ll likely pay a late enrollment penalty unless one of these applies:
- You have other creditable prescription drug coverage
- You get Extra Help
To get Medicare drug coverage, you must join a plan run by an insurance company or other private company approved by Medicare. Each plan can vary in cost and drugs covered. Learn more about Medicare Part D here.
You may owe a late enrollment penalty if, for any continuous period of 63 days or more after your Initial Enrollment Period is over, you go without one of these:
- A Medicare Prescription Drug Plan (Part D)
- A Medicare Advantage Plan (Part C) (like an HMO or PPO)
- Another Medicare health plan that offers Medicare prescription drug coverage
- Creditable prescription drug coverage
2 ways to get drug coverage
- Medicare Prescription Drug Plan (Part D). These plans (sometimes called “PDPs”) add drug coverage to Original Medicare, some Medicare Cost Plans, some Medicare Private Fee-for-Service (PFFS) Plans, and Medicare Medical Savings Account (MSA) Plans.
- Medicare Advantage Plan (Part C)(like an HMO or PPO) or other Medicare health plan that offers Medicare prescription drug coverage. You get all of your Medicare Part A (Hospital Insurance) and Medicare Part B (Medical Insurance) coverage, and prescription drug coverage (Part D), through these plans. Medicare Advantage Plans with prescription drug coverage are sometimes called “MA-PDs.” You must have Part A and Part B to join a Medicare Advantage Plan.
What’s Medicare Supplement Insurance (Medigap)?
A Medicare Supplement Insurance (Medigap) policy helps pay some of the health care costs that Original Medicare doesn’t cover, like:
- Co payments
Medigap policies are sold by private companies.
Some Medigap policies also offer coverage for services that Original Medicare doesn’t cover, like medical care when you travel outside the U.S. If you have Original Medicare and you buy a Medigap policy, here’s what happens:
- Medicare will pay its share of the Medicare-approved amount for covered health care costs.
- Then, your Medigap policy pays its share.
A Medigap policy is different from a Medicare Advantage Plan. Those plans are ways to get Medicare benefits while a Medigap policy only supplements your Original Medicare benefits.
8 things to know about Medigap policies
- You must have Medicare Part A and Part B.
- If you have a Medicare Advantage Plan, you can apply for a Medigap policy. But, make sure you can leave the Medicare Advantage Plan before your Medigap policy begins.
- You pay the private insurance company a monthly premium for your Medigap policy. You pay this monthly premium in addition to the monthly Part B premium that you pay to Medicare.
- A Medigap policy only covers one person. If you and your spouse both want Medigap coverage, you’ll each have to buy separate policies.
- You can buy a Medigap policy from any insurance company that’s licensed in your state to sell one.
- Any standardized Medigap policy is guaranteed renewable even if you have health problems. This means the insurance company can’t cancel your Medigap policy as long as you pay the premium.
- Some Medigap policies sold in the past cover prescription drugs. But, Medigap policies sold after January 1, 2006 aren’t allowed to include prescription drug coverage. If you want prescription drug coverage, you can join a Medicare Prescription Drug Plan (Part D).
- It’s illegal for anyone to sell you a Medigap policy if you have a Medicare Medical Savings Account (MSA) Plan.
When can I buy a Medigap (Medicare Supplemental Insurance Policy)
Buy a policy when you’re first eligible
The best time to buy a Medigap policy is during your 6-month Medigap open enrollment period. During that time, you can buy any Medigap policy sold in your state, even if you have health problems. This period automatically starts the month you’re 65 and enrolled in Medicare Part B (Medical Insurance). After this enrollment period, you may not be able to buy a Medigap policy. If you’re able to buy one, it may cost more. Learn more about Medigap Policies here.
During open enrollment
Medigap insurance companies are generally allowed to use medical underwriting to decide whether to accept your application and how much to charge you for the Medigap policy. However, even if you have health problems, during your Medigap open enrollment period you can buy any policy the company sells for the same price as people with good health.
Find your situation below:
I’m 65 or older.
Your Medigap open enrollment period begins when you enroll in Part B and can’t be changed or repeated. In most cases, it makes sense to enroll in Part B when you’re first eligible, because you might otherwise have to pay a Part B late enrollment penalty.
I’m turning 65.
The best time to buy a Medigap policy is the 6-month period that starts the first day of the month you’re 65 or older and enrolled in Part B. For example, if you turn 65 and are enrolled in Part B in June, the best time for you to buy a Medigap policy is from June to November.
After this enrollment period, your option to buy a Medigap policy may be limited and it may cost more. Some states have additional open enrollment periods.
You’re eligible for Medicare if:
You’re age 65 or older
You’re under 65 with certain disabilities
You have ESRD (end-stage renal disease, permanent kidney failure treated with dialysis or a transplant) or ALS (Lou Gehrig’s disease), regardless of your age
It is important to understand about “guaranteed issue” and when you can sign up for Medicare.
If you would like to understand how the different parts of Medicare work together schedule a 15 minute telephone discussion. We will go over Part A, Part B, Part C, Part D and Supplemental (GAP) Plans. After the discussion you will have a better understanding of how Medicare works and how to make an informative choice.