Medicare Options

A Medicare Supplement (Medigap) insurance, sold by private companies, can help pay some of the health care costs that Original Medicare doesn’t cover, like co-payments, coinsurance, and deductibles.

If you have Original Medicare and you buy a Medigap policy, Medicare will pay its share of the Medicare-approved amount for covered health care costs. 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.

What you need to know about Medicare Supplement policies:

• You must have Medicare Part A and Part B.

• If you have a Medicare Advantage Plan, you can switch to a Medicare Supplement insurance policy, but make sure you can leave the Medicare Advantage Plan before your Medicare Supplement insurance policy begins.

• You pay the private insurance company a monthly premium for your Medicare Supplement insurance policy 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 Medicare Supplement insurance policy from any insurance company that’s licensed in your state to sell one.

• Any standardized Medicare Supplement insurance policy is guaranteed renewable even if you have health problems. This means the insurance company can’t cancel your Medicare Supplement insurance policy as long as you pay the premium.

• Medicare Supplement insurance 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 Advantage Plan unless you’re switching back to Original Medicare.

Information obtained from www.medicare.gov.

Medicare Supplement policies (also known as Medigap policies) are standardized and must follow federal and state laws designed to protect you. Insurance companies can only sell you a “standardized” policy identified in most states by letters (see the chart below).

All policies offer the same basic benefits but some offer additional benefits, so you can choose which one meets your needs. As you can see in the comparison chart there are many options from which to choose. As licensed insurance agents we can help you understand the differences between the plans so that you can decide on the right plan for you. 

Did you know that each insurance company decides which Medigap policies it wants to sell, although state laws might affect which ones they offer. Insurance companies that sell Medigap policies:

• Don’t have to offer every Medigap plan
• Must offer Medigap Plan A if they offer any Medigap policy
• Must also offer Plan C or Plan F if they offer any plan

Keep in mind, that the Medicare Supplement policies covers co-insurance after you’ve paid the deductible (unless the Medigap policy also pays the deductible). 

Download a copy of the Compare Medicare Supplements Chart.

Medicare Advantage Plans, sometimes called Part C, are health plan options that are part of the Medicare program. If you join one of these plans, you generally get all your Medicare-covered health care through the Medicare Advantage Plan.  

This coverage can include prescription drug coverage. Medicare Advantage Plans include:

• Medicare Health Maintenance Organization (HMOs)
• Preferred Provider Organizations (PPO)
• Private Fee-for-Service Plans
• Medicare Special Needs Plans

When you join a Medicare Advantage Plan, you use the health insurance card that you get from the plan for your health care. In most of these plans, there generally are extra benefits and lower co-payments than in the Original Medicare Plan. Most Medicare Advantage Plans are managed care plans, usually a health maintenance organization (HMO) or a preferred provider organization (PPO) and you may have to see doctors that belong to the plan or go to certain hospitals to get services.

To join a Medicare Advantage Plan, you must have Medicare Part A and Part B. You will have to pay your monthly Medicare Part B premium to Medicare. In addition, you may have to pay a monthly premium to your Medicare Advantage Plan for the extra benefits that they offer. In 2019, the standard Part B premium amount is $135.50 (or higher depending on your income). However, some people who get Social Security benefits pay less than this amount, $130 on average in 2018.

When can I enroll?

Keep in mind that Medicare limits when you can join, switch, or drop a Medicare Advantage Plan. You can join a plan when you first become eligible for Medicare. This is anytime beginning three months before the month you turn 65 and ends three months after the month you turned 65.

• For example, if you turn 65 on May 5, your eligibility period starts on February 1 and ends on August 31.
• If you are disabled and have Social Security Disability Insurance, you can join an advantage plan three months before to three months after month 25 of your disability.
• You can switch or drop your Medicare Advantage during an enrollment period between October 15 and December 7 of each year. 

Information obtained from www.medicare.gov.

You can sign up for Part D Prescription Drug Plans, which helps cover prescription drug costs, along with other components of Medicare starting three months before your 65th birthday. It’s important to do this on time because there’s a permanent premium surcharge for enrolling more than three months after your 65th birthday if you don’t have equivalent drug coverage from another source, such as a retiree plan.

We can help you enroll! If you are already enrolled in a Part D “standalone” plan or a Medicare Advantage plan that incorporates drug coverage, you can switch plans during the open-enrollment period, which runs from Oct. 15 to Dec. 7 every year.

Making Part D Work

• Most Prescription Drug Plans have a coverage gap called a donut hole. This means there’s a temporary limit on what the drug plan will cover for drugs. The coverage gap begins after you and your drug plan have spent a certain amount for covered drugs. For 2019, you’re in the coverage gap once you and your plan have spent $3,820 on covered drugs. People with Medicare who get Extra Help paying Part D costs won’t enter the coverage gap.
• Once you reach the coverage gap in 2019, you’ll pay no more than 25% of the plan’s cost for covered brand-name prescription drugs. You get these savings if you buy your prescriptions at a pharmacy or order them through the mail. Some plans may offer higher savings in the coverage gap. The discount will come off of the price that your plans has set with the pharmacy for that specific drug. 
• In 2019, 95% of the price will count as out-of-pocket costs. These items aren’t counted toward your out-of-pocket spending:
  • What the drug plan pays toward the drug cost (5% of the price in 2019)
  • What the drug plan pays toward the dispensing fee (75% of the fee in 2019)

Getting Financial Help

• Individuals with annual incomes of less than $18,210 and financial resources of less than $14,100, or married couples with incomes of less than $28,150, might qualify for Extra Help from Medicare to pay their Part D premiums and out-of-pocket drug costs.

• Learn more about applying for the “Extra Help With Medicare Prescription Drug Plan Costs” program
  • Additionally, read about the six ways to lower your drug costs on Medicare.gov.

Click here to learn more about other Medicare health plan options. 

• Visit Senior Insurance & Retirement Advisor’s portal on Medicare Insurance Direct.
  • Click here to access 2021 enrollment
• Click here to schedule an appointment with our staff.