Medicare supplemental insurance
As of January 2006, there are now twelve different standardized Medicare Supplemental Insurance Plans. These plans are labeled from A through L and are sometimes also referred to as MediGap Plans. Each of these twelve plans offers different benefits with Plan A offering the fewest benefits and Plan J offering the most benefits. Plan A is also the least expensive of all twelve plans with Plan J being the most expensive.
It is important to note that not all twelve Medicare Supplement Insurance plans are currently available in all 50 states. In addition, Wisconsin, Minnesota and Massachusetts have their own plans with names different than the ones listed above, although the benefits of these plans are very similar to the Medicare national plans.
Within each one of the different standardized Medicare Supplemental plans, the benefits are exactly the same from one insurance company to the next. Premiums however, may vary substantially from one carrier to the next. It is important to keep this in mind when choosing the best Medicare Supplemental Insurance as well as the insurance company where you will purchase this insurance. The time to purchase supplemental insurance is within the first six months after you have been enrolled in Medicare Part B. During this time, insurance companies are required to accept you regardless of any pre-existing health needs or conditions that you may have. After this time, you may be required to take a physical examination or you may be denied supplemental insurance altogether if you have medical conditions that are pre-existing.
There are a few things that you should keep in mind about Medicare Supplemental Insurance premiums. It is very important to understand that just because an insurance company may charge a higher premium, this does not necessarily mean that you will receive more or better benefits. Benefits for each plan are the same from one insurance company to the next. Requirements for filing claims are also the same from one company to the next. Keep in mind that even though some companies tell you that you are not required to file a claim form does not mean that they are the better company. Your requirement to file a claim form does not depend on the insurance company where you have coverage. Instead, it depends directly on your physician or other health care providers who may file the forms for you or expect you to file them for yourself.
Medicare benefits are adjusted every year on January 1st. This is done to keep up with inflation. It is also important to note that MediGap benefits are directly coordinated with Medicare, so when benefits go up, premiums typically go up as well.
There are three methods that are currently used to set the premiums for MediGap policies. Your attained age at the time that you are covered will affect the cost of your premiums. Those who have just turned 65 will have lower premiums than those who have been on Medicare benefits for several years. As you grow older, your premiums will increase. This is typically done each year, every three years or every five years. Premiums will typically cap out or reach their highest rate once an insured reaches their 80s.
Your premiums may also depend on your age at the time that your policy is issued. Premiums based on issue age will not increase each year as you grow older but they do reflect the increases of Medicare for inflation purposes.
Your premiums may also be determined based on where you live. With Community Rated policies, everyone who lives in a specific geographical area will pay the same premium no matter their age. It is recommended that you choose the MediGap policy that offers the lowest premium only after you have chosen the benefit combination provided by Medicare Plans A through L. To ensure that your premiums remain the same year after year, issue age or community rated policies are best.
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