In the sphere of health insurance, US citizens have various coverage options at their disposal. Medicare is the national health insurance program, administered by the US federal government through private insurance companies. The Medicare supplements in Phoenix AZ, also known as Medigaps, are the coverage choice of most Medicare policyholders who don’t get additional insurance through their employers or Medicare Part C (Medicare Advantage).
What are Medigap and Medicare supplements in Phoenix AZ?
Medigap is a type of supplemental insurance designed to help with the gaps in the Original Medicare. Original Medicare consists of Part A (hospital insurance) and Part B (medical insurance).
The Medigap policies are standardized by the Centers for Medicare & Medicaid Services (CMS), operating within the Department of Health and Human Services (HHS).
They are regulated on a state level (by state insurance departments). However, the CMS prescribes the minimum coverage that various Medigap plans must provide across the country.
Medigap only supplements Original Medicare and cannot be used as a standalone plan. To purchase a Medigap policy, you must have Original Medicare (Parts A and B).
Note: Medicare beneficiaries can’t be covered by Medicare Advantage and Medigap at the same time.
Medigaps are sold by private companies. When you join a Medigap plan, you will pay your provider a monthly premium in addition to your monthly Part B premium.
Medigap policies up-close
To protect seniors, all Medigap policies are standardized. This means that under the law, all Medigap policies must provide the same basic set of benefits. This basic coverage includes Part A and Part B coinsurance amounts, as well as additional hospital benefits not covered by Original Medicare, as given below:
|Part A Hospital Coinsurance:||Days 61-90 of a hospital stay (in each Medicare benefit period).||Days 91-150 of a hospital stay. (Medicare covers these 60 days only once in a person’s lifetime).|
|Additional Part A Hospital Benefits:||Covers additional 365 days of hospital care once Original Medicare hospital benefits are used up.||100% covered by all Medigaps|
|Pays for the Part B coinsurance after the annual deductible is reached.||100% covered by Plans A, B, C, D, F, G, M, and N (plan N requires up to $20 copayment for some office visits and up to $50 copayment for outpatient ER visits.)|
|Part A and B Blood Coverage:||Pays for the first 3 pints of blood/year.||100% covered by Plans A, B, C, D, F, G, M and N.|
|Part A Hospice Coinsurance:||Covers coinsurance for outpatient prescription drugs and inpatient respite care.||100% covered by Plans A, B, C, D, F, G, M and N.|
Medigap plans available in Arizona
As of 2013, Arizona residents can choose from a total of 11 standardized policies (A, B, C, D F, High Deductible F, G, K, L, M and N). F and High Deductible F are considered separate plans.
Note: As of June 1, 2010, plans D and G have different benefits than those sold before.
Plans E, H, I and J are no longer available, but people that already have them can generally keep them.
All same-letter Medigap plans offer the same benefits, regardless of the provider. In contrast, the costs of same-letter plans vary greatly between providers (based on location, plan level, health and age). Costs can even vary between providers in the same city.
Make sure to get as much information as you can about the plans, their benefits and costs before making your final decision.
All insurance companies selling Medigaps are obligated to offer Plan A. If their offer includes any other Medigap plan, they must offer either Medigap Plan C or Plan F.
Medigaps can also be purchased as Medicare SELECT plans. In this case, in order to receive full insurance benefits, you’ll have to use hospitals and, occasionally, doctors within your plan’s network (except in cases of emergency).
These policies are generally cheaper than other Medigap policies, provided you go to a Medicare SELECT point of care.
If you receive care outside the Medicare SELECT network, you’ll be responsible partially or fully for the costs not covered by Medicare. Medicare will pay its share of approved charges no matter which hospital or doctor you choose.
What Medicare Supplemental Insurance can do for you
Due to the coverage gaps in the Original Medicare, most people choose to buy additional insurance. Medigap policies serve as protection against excessive expenses created by these gaps and unforeseen medical circumstances. This includes longer hospital stays, copayments, deductibles, and health care outside the U.S.
People usually choose supplemental insurance based on their current or potential medical needs, their budget and the insurance company ratings.
As a result, some people opt for a plan which provides more comprehensive, so-called “first dollar coverage”. First dollar coverage means that the Medigap policy pays the deductibles and copayments, with zero out-of-pocket costs for the beneficiary.
Others choose cheaper plans which cover only the most costly services if a medical situation arises.
Healthcare providers may charge more than the Medicare-approved amount for their services and some Medigaps cover these excess costs as well. This gives policyholders more latitude when choosing their hospitals and doctors.
Note: Plans A and B provide basic coverage, and their premiums are the lowest.
The most popular Medigap plans in Arizona and the U.S. are Plan F (40% beneficiaries nationwide) and Plan C (13% beneficiaries nationwide). They are also more comprehensive than other plans.
Medigap plans don’t include prescription drug coverage. For this purpose, you can enroll in a standalone Medicare Prescription Drug Plan (Part D) offered by Medicare-approved private companies.
When to purchase a Medigap policy
The best time to buy a Medigap policy is during the 6-month Medigap Open Enrollment Period. This period starts the month you turn 65 and enroll in Medicare Part B. For the duration of this period:
– You have a guaranteed right to purchase any policy available in your area.
– The insurance provider can’t refuse to sell you a policy or charge you more if you have pre-existing medical conditions.
However, in some cases, the provider can refuse to cover your costs for certain conditions for up to 6 months (pre-existing condition waiting period).
There are also eligibility windows outside the Open Enrollment Period. For instance, certain qualifying life events can make you eligible for a special enrollment period. These events include moving to a new state, certain income changes, as well as changes in family size (marriage, divorce and childbirth).