As a beneficiary with an Original Medicare parts A and B, you have a health insurance program that covers many of the costs to maintain your health care, however there are significant costs that are not covered. Medicare does not cover things like co-payments, coinsurance or deductibles these are called gaps, this is why medicare supplements are often referred to as “Medigap plans”.
Medigap plans are a type of individual health insurance plans that you purchase from private insurance carriers for a premium. When shopping or comparing Medicare supplement plans in Florida, the only thing you need to be concerned with is the rate and rate renewal history of the company you happen to be looking at.
There are a couple reasons for this:
- Medicare supplement plans are standardized, meaning that if you are looking at a Plan F from UnitedHealthCare/Blue Cross/Gerber, be rest assured the benefits are all the same and they all have to pay the claims in the same manner.
- Medigap plans don’t have networks unless you were looking at a Medicare Select plan. So as long as the provider accepts Medicare it does not matter which supplement company you are with you can use any Medicare provider you choose.
A Medicare Select plan is a Medicare supplement policy that is the same as any Plan D-F-G-N, the difference is in return for a reduced premium you would have a select network of hospitals you would need to use. The savings on a Medicare Select plan is usually around 20% dependent on the company.
You may be thinking that Medicare will cover the bulk of your medical expenses, but let’s take a look at some common expenses that would become out of your pocket if you did not have a Medicare supplement or Medicare advantage plan in place.
A Medicare beneficiary would be responsible for your part A hospital deductibles over $1000, the part B deductible of $140 in 2012, that needs to be met before Medicare will cover 80% of all part B charges, and of course there are the part B services themselves such as doctor visits, blood work and expensive lab testing like MRIs and CAT scans.
If you choose a Florida Medigap plan D/F/G/N, the bulk of your medical costs will be covered between your Medicare supplement policy and original Medicare parts A and B, the only other costs you will be responsible for is the premium for a part D drug card and the co-pays and deductibles for prescription medications.
Medicare Supplement Open Enrollment
When you first become eligible for Medicare part A and B you have an open enrollment period, which means you can’t be charged more for being a tobacco user and your health will have absolutely no bearing on your rates. This this is a seven month period, which is three months before your birthday, the month of your birthday and three months after your birthday.
Outside of this period, you won’t have another open enrollment. However, you can change Medicare supplement plans pretty much whenever you want as long as you can pass the underwriting which is pretty lenient compared to applying for an individual health insurance plan in Florida.
Medigap Versus Medicare Advantage
We have another article that explains exactly how Medicare advantage plans work, however in this section were going to explain the differences between the two so that your made easier.
As we discussed earlier a Medigap plan does not have a network so you’re free to use any provider in the country that accepts Medicare.
You’ll won’t have to worry about losing your Medigap plan, it’s guaranteed renewable as long as you pay your premiums. And of course with the most popular Medicare supplemental plans the bulk of your healthcare costs are covered by the supplement. For all those benefits you do pay monthly premium for the plan.
A Medicare advantage plan which also goes by the name of part C is pretty much the exact opposite of a Medigap insurance policy. MA plans are very similar to the type of health insurance plans made available to individuals and families in employer groups for everyone that is under 65.
There are networks, co-pays, deductibles and coinsurance- these are all in one health plans. It includes your medical and your prescription drugs and sometimes you’ll get a basic dental and vision benefit as well.
One of the reasons Medicare Advantage plans are so very popular in Florida is a lot of companies offer a zero premium plan. That’s right that’s not a typo you can get a Medicare health plan including prescription drug coverage with a pretty good network for absolutely no monthly premium coming out of your pocket, huge savings. The reason this is possible is Medicare Advantage plans in Florida are subsidized by the government.
So as a brief recap between the difference of a Medicare supplement policy and a Medicare Advantage plan:
Regardless if you take a Medigap or Part C plan you still have to pay your part B premium which probably comes out of your Social Security check every month which is around $90-100/month. In Florida depending on which county you live in a Medigap supplement plan will run you between $125-250/month, depending on age and location. This is the Cadillac plan– you don’t need to worry about really anything with most Medigap plans. And then for drug coverage you could get a Medicare part D drug plan from Humana for around $15-$40 a month to help save on the cost of prescription drugs. If the additional premium is not for you then you would want to look at a Medicare advantage plan.