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Medicare Supplement

Defining Medicare Supplement Insurance?

Medicare supplement insurance also know as Medigap is a supplemental Medicare coverage program for filling in some of the services that are not covered in the original Medicare program (Parts A and B). Medigap or Medicare Supplemental Insurance as a program is standardized by the same agency such as Medicare and CMS (Centers for Medicare and Medicaid Services), but Medicare Supplement Insurance plans are sold and administered by private companies. Medigap policies, since the introduction of Medicare Part D, are prohibited from covering drugs, and a Medicare Advantage beneficiary can’t claim on a  Supplemental Insurance policy at the same time. So Medigap is an alternative solution to enrolling in a Medicare Advantage plan and is in addition to the original Medicare. In fact, almost one in five Medicare beneficiaries chose s a Medigap or Medicare Supplemental Insurance policy. Medigap Insurance is offered in ten standardized plans, initially labeled A to N, and the rules of selling a Medicare Supplemental policy can vary. Some states require extended coverage in contrast to the definitions of the standardized Medigap Insurance plans. Notably though Medicare covers both spouses, Medicare Supplement Insurance is strictly personal and each spouse must make separate amends if both wish to be covered by Medicare Insurance as well as Medicare. Plan A Medigap Insurance covers coinsurance for Part A and Part B of Medicare, as well as the first three pints of blood that may be needed in any claim and all coinsurance for Part B-covered preventive services after Part B deductible has been covered.

Plan B Medigap Insurance is like Plan A only it also covers hospital deductibles for each benefit period.

Plan C Medigap Insurance is like Plan B but with many more benefits: It covers the additional cost of remaining in a nursing facility after day 20 of the 100-day period allowed by Part A of Medicare. It also pays for the deductible of Part B of Medicare concerning visits to the doctor and outpatient hospital care. Notably, it offers an emergency while abroad coverage, paying 80% of medical fees for up to two months and up to $50,000 for a lifetime, with a deductible cost of $250 per calendar year.

Plan D Medicare Supplemental Insurance is almost the same as Plan C, with a switch: It does not cover the Medicare Part B annual deductible.

Plan F Medigap Insurance is like Plan C, with the addition of paying for excess charges arising from Part B services of Medicare, with a maximum of 15% more than what Medicare approves. Plan F also has a high-deductible version, meaning that monthly premiums are lower than the premiums for the regular plan F, but coverage begins after the annual deductible has been met ($2000 as of 2011).

Plan G Medigap Insurance is a compromise between Plans C and F. It does not cover Part B deductibles, but it covers 100% of excess charges of Part B services as mentioned in Plan F Medicare supplemental insurance.

Plans K and L Medicare Supplement Insurance are quite similar. Both cover the coinsurance costs of hospital stays. Then the differences start: a percentage of Part B coinsurance, the first three pints of blood, hospital deductibles, as well skilled nursing facility stays past the first 20 days are covered on a shared basis. Plan K covers 50%, while Plan L covers 75%.

Both Plans (K and L) cover for 100% of Medicare’s Part A and B coinsurance after the annual maximum has been paid. In the case of Plan K that is $4,140; in the case of Plan L that’s $2070.

There have been two recent additions to the Medicare Supplemental Insurance plan options – Plan M Medigap and Plan N Medigap. Medicare Supplemental Plan N has similar benefits to Plan D Medicare Supplemental Insurance, but there is a $20 co-payment for doctor visits and a $50 co-payment for emergency room visits. The co-pay applies after the $162 deductible is paid. Plan M Medicare Supplement Insurance offers similar benefits to Plan D Medicare Supplement Insurance, but only covers 50% of the Part A deductible and none of the Part B deductible.

Medigap policies sold in Massachusetts, Minnesota and Wisconsin have somewhat different plans and offer prescription drug coverage, in some cases in more depth (covering a wider range of drugs than in Part D.

Who is eligible for this Insurance?

Medicare Supplemental Insurance is available to those that already have Medicare coverage, both Parts A and B. The monthly Medicare Part B premium must be paid, as well as an additional premium to the Medicare Supplemental insurance company. Prices for the plans are standardized. As mentioned earlier, each spouse must buy his or her own Medicare Supplemental Insurance plan, since they do not offer mutual coverage.The best time to buy Medicare Supplement plans is during the Open Enrollment period. This is a 6 month period that begins on the first day of the month in which both spouses are 65 years old or older and have enrolled in Medicare Part B. In some states, additional open enrollment periods are available, including for people under the age of 65.During the Open Enrollment Period, insurance companies cannot use medical underwriting. This means that;

  • They cannot refuse to sell you any Medicare Supplement plans they are selling,
  • They cannot charge you more for a policy because of health problems, and
  • They cannot force you to wait for coverage except in the case of a pre-existing condition although many states don’t allow this and most Medicare supplement plans waive this anyway.

To prevent these types of problems it is a good idea to buy a policy during the Open Enrollment Period especially if you can prove you have recent creditable coverage. If you have at least six months of continuous prior creditable coverage, a Medicare Supplemental Insurance company can’t make you wait before coverage before any pre-existing condition coverage starts.

How to enroll in this kind of Policy

Many supplement insurance companies such as Mutual of Omaha Medicare supplements, United of Omaha Medicare supplements and AARP Medicare supplement offer a variety of supplement insurance for Medicare plans, with a small but not a negligible difference in pricing. AARP Medicare Supplement Insurance company requires fewer medical questions than other companies. One of the key differences is more in terms of what an insurance company can offer in terms of customer service and prompt handling of claims and concerns. For example our agency, Golden Age Providers can assist with researching the best sorts of Medicare Supplemental programs to suit your needs; obtaining Medicare Supplemental quotes and helping you to apply online for the services that suit you and that you can afford.

The purposes of enrolling in a Medicare Supplement Plan

A Medigap Supplement effectively tries to do away with the coinsurance costs that can follow on from having the original Medicare program. As long as the Medicare Supplement insurance premiums are being paid then you do not have to worry about any costs that can result from an extended hospitalization or recovery period. For those of you who like to travel a lot, Medicare supplement insurance offers you peace of mind when it comes to worrying about medicals costs incurred overseas.All in all, Medicare supplement plans are designed to bridge the gaps in Medicare without forcing beneficiaries to get their medical services and benefits through certain networks. It also helps you, as an insured individual, to feel better cared for when the added costs and fees are taken into account from the start especially if you develop long term medical conditions after taking out your insurance. Important facts you should know about Medicare Supplements. Each spouse should get his or her own Medicare supplemental insurance policy since unlike Medicare; Medicare supplement policy is strictly personal and does not cover both spouses.

The best time to buy a Medicare supplemental policy is during the Open Enrollment period since then insurance companies have to follow a strict set of rules and cannot use medical underwriting against you to reduce any benefits you can receive.

Medicare Supplemental plans are standardized and have consistency across the U.S. with the exception of the States of Massachusetts, Minnesota, and Wisconsin where special versions of the plans apply.

Medicare supplemental insurance plans have varied prices and care should be taken to avoid agents and companies with difficult underwriting policies that try to prevent you from getting the coverage you deserve. Remember that as a general rule, you get what you pay for, so a cheap health plan is not always your best option.

Which Medicare Supplement plans are right for you?

We’ve looked into Medicare Supplement Insurance, and by now you should have a good understanding of where you are going.

So, which Medicare Supplement should you pick? Ideally you want to chose a Medicare Supplemental policy that will best suit your individual needs in the most meaningful manner. Medicare Supplements Plan G and Medicare Supplement Plan F are quite popular for example since they cover most of your needs that Medicare does not, and at a sensible cost. Since the modernization of Medicare Supplement plans in June of 2010, Medigap Supplement Plan M and Medicare Supplement Plan N have become very popular as well, due to the premium saving achieved through cost sharing. Ultimately, you should chose the Medicare Supplement plan that works best for you.

Popularity Increases in Medigap Insurance

The newest Medicare Supplemental membership figures show continued development in the quantity of new policies being issued. The amount of more recent policies, those issued in the last 3 years, increased by 5.9% in 2010 in comparison to the 2009 base. Expansion increased compared against 2009 when carriers had experienced 1.3% expansion in new policies. Though total membership declined from 9.508 million in 2009, attrition was essentially due to erosion of the older policy base. Between the years 2007 and 2010, carriers jointly reported a total of 93,284 less covered lives.

A review of the Medicare Supplemental Insurance Market

Industry consolidation continued in 2010 with 177 carriers remaining in the Medicare Supplement industry and only 114 carriers reported writing new policies in the last 3 years. Medicare Supplement plans earned $20.045 billion in premiums and sustained $15.857 in claims during 2010. The total loss proportion, sustained claims as a % of earned premiums, hovered around 80% from 2007 to 2009 but dropped a little to 79% in 2010.

Medicare Supplement Plan F still a favorite plan

Medicare Supplement Plan F, the hottest design that covers Medicare supplement deductibles as well as coinsurance and copayment costs was bought by 44% of folks with Medigap coverage in 2010. Newly offered Plan N gained 147,912 members since June 2010 when it was introduced, most of which were written by Mutual of Omaha, United of Omaha Medicare and AARP Medicare. Plan M didn’t fare so well, with only 265 covered lives. Popularity in Medicare Supplement Plan F should continue to remain steady.

Top Medicare Supplemental Insurance Companies

Leading managed care affiliations, Blue Cross plans, regional plans and multiline carriers compete in the  Supplement space. UnitedHealth, with a longstanding AARP Medicare Supplement contract reigns over the segment with 32% share of the market. Mutual of Omaha Medicare Supplement also know as United of Omaha Medicare Supplement plans rank a distant 2nd with 11% share. Mutual of Omaha’s Supplement share improved from 8% in 2009 to almost 11% in 2010. Many corporations are widening their Medicare portfolios with Medicare Supplement, Medicare Advantage as well as stand-alone Part D plans to better leverage possibilities in the growing senior market. The competitive landscape could change seriously as new firms and new releases enter this dynamic medicare supplement market. New companies such as Combined Medicare Supplement Insurance will enter the market.

New Companies Expected to Enter the Supplement Insurance Market in 2012

According to a CSG Actuarial report, new carrier entrants to the Medicare Supplement market in 2011 were minimal. As indicated by the large number of reported rate changes in recent CSG Actuarial Reports, overall  Supplement insurance market pricing has softened and new carriers are once again looking to enter the Medigap market. Based on our view of the new entrant filings, We are estimating 5-10 new carriers will enter the Supplement insurance market in 2012 and compete for the 50 million Medicare recipients, 3.3 million of which are newly eligible turning 65. More information regarding CSG Actuarial’s view of the future Medigap market is available in our Medicare Supplement 2010-2020 Market Projection Research Paper.

TAG: Medicare Supplement