Here’s why Medicare beneficiaries should look beyond cost when choosing a Medigap plan

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Are You Considering a Medicare Supplement Plan, Also Known As A Medigap? Make sure you choose one that isn’t just based on cost.

These policies, which are sold by private insurance companies, generally cover some or most of the co-payments, i.e. copays or deductibles, associated with basic Medicare coverage (Part A Health Insurance and Part B Outpatient Care). And they’re standardized in most states, so you know the benefits are the same regardless of where you live or which insurance company offers Plan G or Plan N, for example.

However, costs can vary widely between insurers and locations. For example, the monthly rewards for the popular Plan G for a 65-year-old are between $ 90 and $ 476. This is the result of an eHealth study that examined 67 regions across the country. For Plan N, the range is between $ 78 and $ 284. (These two plans are the most popular, accounting for about 87% of newly acquired Medigap plans through eHealth.)

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Whichever plan you choose, the premiums tend to rise every year – some more than others – and switching to a different plan can be difficult depending on where you live and whether you need to get medical insurance .

“What if you choose a plan strictly based on price, ignore all other factors and later your health deteriorates, the premiums have increased significantly and you are now stuck with that carrier?” said Elizabeth Gavino, founder of Lewin & Gavino and independent broker and general agent for Medicare plans.

Here’s what to know.

The basics

More than 63 million people – most of whom are 65 years of age or older – are enrolled with Medicare. Approximately 43% of beneficiaries choose to deliver Parts A and B (again, Basic Medicare) through an out-of-pocket benefit plan (Part C) that often includes other benefits such as dental and visual coverage. They also typically include prescription drug coverage under Part D.

The remaining beneficiaries choose to stick with Medicare, often combining it with a stand-alone Part-D drug plan. In this situation, unless you have additional coverage elsewhere (such as employer-sponsored insurance or Medicaid), the option to reduce your expenses is a Medigap policy. Again, this can limit what you pay out of pocket each year.

The reasons for sticking to Basic Medicare instead of signing up for a benefit plan vary from person to person, Gavino said. This may include wanting more freedom in choosing a provider or needing coverage when you are away from home – that is, you travel a lot, sometimes for longer stays. (You can cancel benefit plans if you are outside of the service area for a certain period of time – usually six months.)

If you can login

Typically, the first time you sign up for Part B, you have six months to purchase a Medigap plan without an insurance company reviewing your medical history and deciding if you should be insured. Depending on the specifics of your situation and the state in which you live, you may need to take out medical insurance afterwards.

“If you know you have a health condition that is likely to prevent you from changing plans later, ask your broker for recommendations … in the long run,” said Danielle Roberts, co-founder of insurance company Boomer Benefits.

While a number of insurers offer Medigap policies, they can only offer policies from a list of around 10 standardized plans. Each is simply assigned a letter: A, B, C, D, F, G, K, L, M, and N, although plans C and F are not available to people new to Medicare on or after January 1 were eligible. 2020. Some states also offer high-deductible versions of Plan F and G. (There are also Medicare Select plans, which are network-based Medigap plans that are available in a few places.)

If you know you have a health condition that is likely to prevent you from changing plans later, ask your broker for recommendations … in the long run.

Danielle Roberts

Co-founder of Boomer Benefits

The plans differ in terms of what is covered. For example, some offer limited coverage for international travel while others do not. The Centers for Medicare and Medicaid Services have a table on their website that shows the differences. You can also use the agency’s search tool to find available plans in your zip code.

How they are set

A difference in the rewards may result from how they are “valued”. Knowing this can help you anticipate what may or may not happen to your premium later on.

Some guidelines are “community rated,” which means that anyone who buys a particular plan pays the same rate regardless of their age.

Others are based on “age reached,” which means the rate you get when you buy is based on your age and increases as you age. Still others use the “issue age”: the tariff doesn’t change as you get older. However, it is based on your age at the time the policy was purchased (therefore younger people may pay less).

The premiums can also increase from year to year due to other factors such as inflation and insurance increases.

It pays to choose an insurance company that has a good track record, said Gavino.

“Some airlines may enter the market at low prices [premiums] to attract businesses, but the next year could raise rates by a significant amount once they have a little history of claims, “she said.

Opportunities and goals

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