Question: I’ll be 65 in a few months, Medicare enrollment age, and I am thinking about getting a Medicare supplemental policy. Can you give me advice on choosing a plan?
Answer: If you’re planning to choose original Medicare for your health coverage, getting a supplemental policy, too, (also known as Medigap insurance) is a good idea if you can afford it. It will help pay for things that are not covered by Medicare, such as co-payments, coinsurance and deductibles.
Medigap policies, which are sold by private health insurers, come in 10 standardized benefit packages labeled as the letters A, B, C, D, F, G, K, L, M and N.
Plan F is the most popular, followed by Plan C because they provide the most comprehensive coverage. Plans M and N, the two newest options, are cost-sharing plans that have cheaper premiums, which make them appealing to healthier retirees who do not use as much health care.
For information on the plans, call Medicare at (800) 633-4227 and ask for a free copy of the “Choosing a Medigap Policy” guide (Publication 02110), or see medicare.gov/pubs/pdf/02110.pdf.
To choose a policy, consider your health status and family medical history. The differences among plans can be small and rather confusing, so you’ll need to do some homework to pick a plan that works best for you.
To help you choose, use the Medigap online search tool at medicare.gov and click on “Supplements & Other Insurance” at the top of the page, then on “Compare Medigap Policies.” This tool will break down what each plan covers along with premium cost ranges, and it lists the companies that offer them in your area.
Since all Medigap policies with the same letter must cover the same benefits, shop for the cheapest policy.
You’ll get the best price if you sign up within six months after enrolling in Medicare Part B. During this open-enrollment period, an insurer cannot refuse to sell you a policy or charge you more because of your health.
You also need to be aware of the three pricing methods that will affect your costs. Medigap policies are usually sold as:
- • “Attained-age” policies, whose premiums start low but increase as you get older.
- • “Issue-age” policies increase prices because of inflation, not age. These policies might start out a little more expensive than attained-age policies but generally have few rate increases over time.
- • “Community-rate” policies, where everyone in an area is charged the same premium regardless of age. Issue-age and community-rate policies will usually save you money in the long run.
Medigap policies do not cover prescription drugs, so if you don’t have drug coverage, you need to consider buying a separate Medicare Part D drug plan, too. You can compare plans and cost at medicare.gov/find-a-plan. Also note that Medigap plans do not cover vision or dental care, hearing aids or long-term care, either.
Instead of getting original Medicare, plus a Medigap policy and a separate Part D drug plan, you could sign up for a Medicare Advantage plan that provides all-in-one coverage. These plans, which are sold by insurance companies, are generally available through HMOs and PPOs. To find and compare Advantage plans, visit medicare.gov/find-a-plan.
If you need help, contact your State Health Insurance Assistance Program, which provides free Medicare counseling. See ShipTalk.org or call (800) 677-1116 to locate a counselor in your area.
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Jim Miller – Editor of the Savvy Senior
April 7th, 2013