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Basics of Medicare Supplement Insurance

Medicare elderlycouple

The Basics of Medicare Supplement Insurance
Medicare is health insurance for

  • People age 65 or older
  • People under 65 with certain disabilities, including End Stage RenalDisease

You have two Medicare insurance coverage choices:

  • Medicare Part A
  • Medicare Part B
  • May offer additional Benefits

What it covers

A Medicare Advantage Plan (like an HMO or PPO) is another health coverage choice you may have as part of Medicare.

Medicare Advantage Plans, sometimes called Medicare Part C or MA Plans, are offered by private companies approved by Medicare.  If you join a Medicare Advantage Plan, the plan will provide all your Medicare Part A (hospital insurance) and Medicare Part B (medical insurance) coverage.  In all plan types, you’re always covered for emergency and urgent care.

Not all Medicare Advantage Plans work the same way.  Out-of-pockets can vary; some plans require referrals to see specialists and many have provider networks.

Types of Medicare Advantage Plans include the following:

  • Health Maintenance Organization (HMO) Plans
  • Preferred Provider Organization (PPO) Plans
  • Private Fee-for-Service (PFFS) Plans
  • Medical Savings Account (MSA) Plans
  • Special Needs Plans (SNP)

Part D

Optional Prescription Drug Coverage

Medicare Part D is a prescription drug option run by privateInsurance companies approved by and under contract with Medicare to help cover the cost of prescription drugs.  It may help lower your prescription drug costs and help protect against higher costs in the future.

You have out-of-pocket costs with Original Medicare

The amount you must pay before any coverage pays.

An amount may be required to pay as your share of the cost for services after you pay any deductibles.  Coinsurance is usually a percentage (for example, 20%).

An amount you may be required to pay as your share of the cost for a medical service or supply.  A copayment is usually a set amount, for example, you might pay $10 or $20 for a doctor’s visit or prescription drug.

  • Medicare Part A Coinsurance
  • Medicare Part B Coinsurance
  • Deductible Coverage Available

What it covers

Works with Original Medicare Parts A and B
A Medicare supplement insurance policy, also known as a Medigap policy, helps pay your share (coinsurance, copayments or deductibles) of the costs of Medicare-covered services.  Some Medicare supplement policies cover certain costs not covered by Original Medicare Parts A and B.

Companies Offer the Same Basic Benefits
Medicare supplement insurance companies can only sell you a standardized Medicare supplement policy identified by letters A through N. Each standardized Medicare supplement insurance policy must offer the same basic benefits, no matter which insurance company sells it.  Cost and customer service are usually the only difference between Medicare supplement policies sold by different insurance companies.

Medicare AACoupleWhen You can Apply for Medicare Supplement Insurance

You can apply for a Medicare supplement insurance policy just about any time you’re eligible for Medicare and enrolled in Medicare Part B, including when:

  • You’re in your open enrollment period
  • You’re past your open enrollment period as long as you don’t have other coverage
  • You want a Medicare supplement plan with a lower premium
  • You leave your Medicare Advantage/Private Fee for Service plan
  • Your employer discontinues its group retiree health coverage

Your open enrollment period lasts for six months and begins on the first day of the month in which you’re both age 65 or older and enrolled in Medicare Part B(some states may have additional open enrollment rights under state law).  During the period, an insurance company cannot use medical underwriting.  This means you’re in a guaranteed issue situation and the company cannot:

  • Refuse to sell you any Medicare supplement insurance policy it sells
  • Make you wait for coverage to start (except in limited circumstances)
  • Charge you more for a Medicare supplement insurance policy because of any past or present health conditions

In the six months prior to and following your Medicare Part B eligibility (typically age 65), you can be approved for a Medicare Supplement Insurance policy with answering a single health question.


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