In this article, I will go over everything you need to understand about Medicare Supplement Plans. These are very important decisions that you have to make and the only way you can do that is to understand all your options. If you get this wrong, it might cost you a lot of money. Let’s not waste any time, I hope you find this article “Medicare Supplement Plans in 2021?” helpful.
Why Is Original Medicare NOT Enough?
Original Medicare is one of the best health insurance programs in our country. If you have Original Medicare you can go to any doctor or facility in the US that accepts Medicare as payment. Which is ruffly 95% of all providers.
Everyone wants Medicare but Medicare does NOT cover everything and it’s definitely not free. When you become eligible for Medicare due to age or disability, you will have some costs associated with your coverage. Let’s break down what you will have to pay.
Medicare comes in 2 original parts, you have Part A & B. Let’s break down Part A first. Part A is your Hospital Insurance, most US citizens & legal residents who have worked and paid taxes for more than 10 years in the US will NOT have a monthly premium for Part A.
The way that is calculated is, you get 4 work credits for every year that you have worked and paid FICA (Federal Insurance Contribution Act) taxes. You need 40 credits for a $0 monthly premium for Part A. So if you have worked for 10 full years that means you will have earned 40 credits.
If for whatever reason you have not accumulated 40 work credits, you will have to pay a monthly premium for Part A. If you have 30 to 39 credits, you will have to pay $259 (2021) per month for Part A coverage. If you have fewer than 30 credits you will have to pay $471 per month.
If you keep on working and earning credits, your premium will be adjusted based on how many you have until you reach 40 and your premium becomes $0.
Again, Part A is your hospital insurance, when you are admitted into a hospital, Part A will cover the costs of your stay. But you will have to pay a deductible of $1484 (2021) which covers all your hospital charges for 60 days.
(Note: Most doctors are not employees of hospitals, they are contracted throughout other companies who have a contract with that hospital. The reason I’m mentioning this is because the bill for the doctors is billed under Part B which you will read about next.)
If you go home after a few days but you return in a month, that deductible will still cover you, you don’t have to pay it again until the 60 days have passed since you originally were admitted. You can pay this deductible up to 6 times per year if you happen to be admitted into a hospital every two months for something.
Let’s say you’re having a bad time and you have to stay in the hospital for more than 60 days. From day 61 to 90 in the hospital, you will have to pay a daily coinsurance of $371 (2021) per day.
Now let’s say you’re having a really bad year and you have to be in the hospital for more than 90 days. At this point, you reach something called your Lifetime Reserve Days. Medicare gives you another 60 days of coverage if you happen to be in the hospital past 90 days at any given time. The reason these days are called Lifetime Reserve Days is that once you use them you don’t get them back. You get to use these days only once in your lifetime. So if you use 10 of them, you only have 50 left and so on.
Nothing is free, of course, you will have a coinsurance even for your Lifetime Reserve Days. In 2021 your daily coinsurance is $742. Once you use up all your Lifetime Reserve Days you will be responsible for 100% of the bill unless you have other coverage that will protect you. Keep reading to find out what your options are.
Skilled Nursing Facilities (SNF)
Most people when they spend some time in the Hospital will need some Skilled Nursing care afterwards to completely recover.
Part A covers Skilled Nursing Facilities for most people. If you need services for less than 20 days, you pay $0. If you need services for longer, you will have to pay a daily coinsurance of $185.50 (2021) for any days that you use between 21 days and 100 days. If you are longer than 100 days in an SNF you will have to pay the full bill for any days above 100.
Let's recap what you are responsible for in Part A (2021)
- Part A = $0 (most)
- Ded (1-60) = $1484
- Ded (60 – 90) = $371 per day
- LRD (60) = $742 per day
- SNF (1-20) = $0 per day
- SNF (21-100) = $185.50 per day
Medicare Part B is your medical insurance, it helps pay for services from doctors and other health care providers, outpatient care, home health care, durable medical equipment, and some preventive services. Basically, almost everything outside of a hospital is handled by Part B. This is the coverage part of Medicare that you will be using the most.
You WILL have to pay a monthly premium for Part B. The standard Part B premium in 2021 is $148.50. Most people pay the standard Part B premium amount. If you’re modified adjusted gross income as reported on your IRS tax return from 2 years ago is above a certain amount, you’ll pay the standard premium amount and an Income Related Monthly Adjustment Amount (IRMAA). IRMAA is an extra charge added to your premium.
Here is the income chart if you want to see what each income group pays for Part B.
Part B deductible & coinsurance
Part B also has a yearly deductible. In 2021, you have to pay $203 for your Part B deductible. After you pay you’re deductible for the year, Medicare Part B will pay 80% and you will pay 20% of all for the following (not exclusive list):
- Most doctor services (including most doctor services while you’re a hospital inpatient)
- Outpatient therapy
The most dangerous part of Medicare is the 20% of Part B services which you are responsible for. Medicare does NOT have a maximum out of pocket, so if the bill is $100,000, you will be responsible for $20,000.
Let's recap what you are responsible for in Part B (2021)
- Part B = $148.50 (most)
- Ded = $203
- Everything after Ded = 20% (no limit)
As you just read, Medicare has many financial gaps that can cost you a lot of money if you don’t protect yourself correctly. Next, I’m going to show you great options to protect yourself from those gabs and still keep your freedom to choose the care you want. Over 60% of people who have Original Medicare own a Medicare Supplement plan so let find out why…
What is a Medicare Supplement Plan?
A Medicare Supplement Insurance policy can help you pay the health care costs that Original Medicare doesn’t cover, like coinsurance, copayments, or deductibles. A Medicare Supplement Plan is also called a Medigap Plan.
Over 60% of people who have Original Medicare, also own a Medigap plan to protect themself from the gaps which Medicare does not cover. Medigap plans are sold by private insurance companies and not the government.
If you would like to buy a Medigap plan, click the picture below and schedule a time with me so that I can answer all your questions and find you the most affordable plan in your area.
Here is a few reasons why you should keep reading about Medigap…
- Predictable costs help you stay ahead of unexpected out-of-pocket expenses.
- No network restrictions mean you can see any doctor who accepts Medicare.
- You don’t need a referral to see a specialist.
- Coverage goes with you anywhere you travel in the U.S.
- There is a range of plans available to fit your health needs and budget goals.
- Purchasing a Medicare Supplement Plan and a Medicare Part D prescription drug plan could give you more complete coverage.
- Guaranteed coverage for * life means your plan can’t be canceled.
*As long as you pay your premiums when due and you do not make any material misrepresentation when you apply for this plan
How do Medicare Supplement plans work with Original Medicare?
Medicare Supplement plans don’t replace Original Medicare. Instead, Medicare Supplement plans work alongside your Original Medicare coverage to help cover some of the costs that you would normally have to pay for on your own.
To give you an example, here is how the billing works, this is, of course, oversimplified but it gives you an idea:
- You go to the doctor
- Doctor bills Medicare
- Medicare approves the bill
- Medicare pays 80%
- Medicare sents the remaining balance to your Medigap Insurance company
- Medigap company pays that bill on your behalf
Every Medigap policy must follow federal and state laws designed to protect you, and it must be clearly identified as “Medicare Supplement Insurance.” Insurance companies can sell you only a “standardized” policy identified in most states by letters. All policies offer the same basic benefits but some offer additional benefits, so you can choose which one meets your needs.
There is a total of 12 different Medigap plans, each is identified by a letter. Don’t wrap your head around all the different plans because most people only ever consider G, N & High Deductible G. Here is the chart of all the plans, the percentage you see in the boxes means that plan covers that amount on your behalf. But again please don’t worry too much about this chart because below I’m going to break down the 3 plans you should look at.
G, N & High Ded G
Based on my experience, countless clients and the majority of the 60% of Medicare beneficiaries who choose wisely I would like to explain to you now Plan G, N & High Deductible G.
If you noticed, I’m not recommending Plan F or C. The reason for that is because, since Jan 1st, 2020, plan F & C are no longer available for purchase for new Medicare beneficiaries. The government decided that you should have more skin in the game when it comes to your healthcare cost so they removed those plans because they cover the Part B deductible. As of Jan 1st 2020, no plan is allowed to cover the Part B deductible.
If you had Medicare before Jan 1st, 2020 you can still buy these plans if you want, but it is expected that these plans will have high premium increases over the upcoming years because no new people who are healthy will be buying them, causing the an increase in claim from people who still have these plans but are getting older.
This is currently the most purchased plan. Plan G is also very simple. You will have to pay a monthly premium for Plan G. I live in the Tampa Bay area here in Florida and if you are turning 65, your a nonsmoker, you will pay between $170 & $200 per month for this plan. This amount varies based on where you live. Some areas are more and some are less.
With Plan G you are only responsible for the Part B deductible ($203 in 2021). That means you will have to pay the first $203 of your Part B medical expenses. After you have paid the deductible, Plan G will cover all medicare approved amounts that are leftover after Medicare pay’s the first portion of the bill. Plan G will also cover an additional 365 days of coverage after you use up your Lifetime Reserve Days in Part A of Medicare.
You can go to ANY DOCTOR or MEDICAL FACILITY, ANYWHERE in the United States WITHOUT any kind of referrals, as long as they accept Medicare as payment. Most plans also offer Foreign Travel coverage, most plans that I have seen are between $25,000 to $50,000 in protection if something happens outside of the United States. (Please check your plan details for verification of amounts offered)
Plan N runs the same way as Plan G, but with Plan N you will have to pay the Part B deductible and a small copayment when you go see your doctor. Usually around $20 per visit. You will also have a $50 deductible if you go to the ER. (Deductible is waived if you are admitted into the hospital because of that ER visit)
Because you have the office visit fee and the ER deductible, Plan N is normally around $30 to $50 cheaper per month compared to Plan G. That is the norm in my area, the cost might be different where you live.
Again…You can go to ANY DOCTOR or MEDICAL FACILITY, ANYWHERE in the United States WITHOUT any kind of referrals, as long as they accept Medicare as payment you are good to go. Most plans also offer Foreign Travel coverage, most plans that I have seen are between $25,000 to $50,000 in protection if something happens outside of the United States. (Please check your plan details for verification amounts offered)
High Deductible G
If you are an healthy individual without a lot of family history of illness, this plan might be for you. High Deductible G around my area cost only on average $50 to $75 per month. The reason why it’s so cheap is because you have a $2,370 Deductible.
Think about it, if you only go to the doctor for your normal yearly check up it’s going to cost you maybe a few hundred bucks out of pocket. But you have a small monthly premium and you are still protected if something bad happens. If anything happens and you pay your full deductible in a single year, the plan takes all medicare approved charges that are left over after that. People who consider this plan just have to make sure that they have the financing available to cover everything before the deductible is met and the plan starts paying.
Again…You can go to ANY DOCTOR or MEDICAL FACILITY, ANYWHERE in the United States WITHOUT any kind of referrals. This plan also offers Foreign Travel coverage once you have reach your deductible, the plans that I have seen are between $25,000 to $50,000 in protection if something happens outside of the United States. (Please check your plan details for verification amounts offered)
If you are interested any in of these options, keep on reading to find out when you can buy it and the qualification necessary. If you have any questions, my number is 813-842-1421 or send me an email at firstname.lastname@example.org
When can you buy a Medicare Supplement Plan?
The best time to buy a Medigap plan is when you enter what is called your Medicare Supplement Open Enrollment Period (OEP), it lasts for six months and starts when you are both 65 or older and enrolled in Medicare Part B.
If you are Turing 65, now is the time to buy the plan that will protect your hard-earned money from being consumed by medical costs. Click the picture or call me at 813-842-1421 to schedule an appointment with me. I will answer any questions you have and together we will find you the best plan for you.
You might ask yourself why this specific time frame? The reason for that is because during these 6 month’s you get what is call Guaranteed-Issue Rights.
Guaranteed-issue rights may protect you from medical underwriting. Health insurance companies often use your health history and data on pre-existing conditions to make determinations about whether or not they will cover you and how much they will charge you for coverage.
This process is called medical underwriting. There are two situations where you won’t be subjected to medical underwriting when applying for a Medicare Supplement insurance plan. The first situation is during your Medicare Supplement Open Enrollment Period (OEP), which again lasts for six months and starts when you are both 65 or older and enrolled in Medicare Part B.
The second situation is if you have guaranteed-issue rights. Guaranteed-issue rights usually occur when you are exercising a trial right or because you lose health insurance through a situation outside of your control or because you move.
What if you don't have Guaranteed Issue rights?
You can apply for a Medicare Supplement plan year around and if you already have a Medicare Supplement plan you can also switch plans at any time, but you will have to answer medical history questions and the insurance company can decline your application if they believe that you will cost them a lot of money because of your health.
If you do get approved it is important to note that pre-existing conditions are health conditions that existed before the start of a policy. They may limit coverage for a certain timeframe or they may be excluded from coverage. It is very important that you ask the right questions and know the plans before you make a change.
How can I get guaranteed-issue rights?
Specific situations in which have guaranteed-issue rights are described below. Some states may allow additional situations to qualify you for guaranteed-issue rights. Outside of your Medicare Supplement OEP, guaranteed-issue rights are often limited to only a few plans.
- Your Medicare Advantage plan leaves Medicare or stops giving care in your area, or you move out of the plan’s service area.
- Your employer group health plan, including retiree, COBRA, or union coverage is ending.
- You move out of the Medicare SELECT plan’s service area.
- Within 12 months of joining Medicare Advantage, you decide you want to switch to Original Medicare.
Keep in mind that this is not a full list of situations that could qualify you for a guaranteed issue. Call me if you believe you have a situation which might give you these right’s 813-842-1421.
Also, keep in mind that in most situations you must buy your Medicare Supplement insurance plan within 63 calendar days of your previous coverage ending.
Remember these facts!
- A Medicare Supplement plan is also called a Medigap plan, it’s the same thing.
- A Medigap plan works with your Original Medicare.
- A Medigap plan is NOT an Advantage Plan (Part C)
- With a Medigap plan, you can go to ANY Doctor or Facility that accepts Medicare ANYWHERE in the US.
- You do NOT need a referral.
- You can switch plans at ANY time of the year (as long as you can get approved)
- Your Medical Bills are predictable.