Tricks for Using Medicare Supplement Insurance

Is a Medigap Plan Right for You?

Medicare Supplement Insurance Medigap
Medigap plans cover costs that Medicare leaves on the table. DNY59/E+/Getty Images

Medicare Supplement Insurance, also known as Medigap, can help you to keep healthcare costs down. These plans are not an official part of Medicare even though the federal government sets guidelines for what they must cover. These plans are offered to you by private insurance companies.

Medigap Coverage

Medicare Supplement Insurance does not add extra health services to your coverage but it does help to pay the costs that Medicare leaves on the table, costs like deductibles, copays and coinsurance.

The plans are lettered A through N. You will need to decide how much coverage you need.

Eligibility

To be eligible for Medicare Supplement Insurance, you need to meet all of the following requirements:

All insurance companies offer Medigap plans to Medicare beneficiaries 65 years and older. If you are younger and qualify for Medicare based on a disability, you may or may not have access to Medigap where you live.

Open Enrollment Period for Medigap

Your Open Enrollment Period for Medicare Supplement Insurance begins when you sign up for Part B and lasts for six months. This is a once in a lifetime event. This is not to be confused with the Open Enrollment Period for Medicare which happens every year from October 15 through December 7.

Late Penalties

There are not late penalties to pay as with Medicare. However, signing up for a Medigap plan after your Open Enrollment Period could cost you more. This is because private insurance companies cannot charge you more or deny you coverage for pre-existing conditions during the OEP but they can if you try to sign up afterward.

Pre-Existing Conditions

The Affordable Care Act made it the case that insurance companies could not deny you coverage based on pre-existing conditions but not so for Medicare Supplement Insurance. This is because Medicare Supplement Insurance does not actually pay for actual health care. It only pays for costs left over by Original Medicare.

Changing Medigap Plans

You have guaranteed issue rights when it comes to Medicare Supplement Insurance. This means the government allows you to change plans when certain situations come into play. Specifically, an insurance company must allow you to purchase a Medigap plan at the base rate if you lose your Medicare Advantage or Medigap coverage because the plan is no longer available, the plan misled you, or you moved out of the plan's coverage area.

There may be other times when you can change from one Medigap plan to another but this is at the discretion of the insurance company. Though you may be able to enroll in another Medigap plan, you may be subjected to higher rates.

You have a 30 day trial period to decide if you like the new Medigap plan or if you would like to return to your old one.

Canceling Your Medigap Plan

If you cancel your Medigap for any reason, know that you may not be able to sign up for one again. An insurance company could deny you coverage if you try to sign up outside your Open Enrollment window. This could be for any number of reasons, including pre-existing conditions. There are no federal protections in place that require an insurance company to allow you to sign up or change plans when guaranteed issue rights are not in play.

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