As you get older, health insurance becomes an undeniable necessity, regardless of current health status. Medicare, the national health coverage system managed by the US federal government primarily addresses the insurance needs of senior citizens and the disabled. Its coverage however is limited, hence many Medicare beneficiaries opt for some form of additional health insurance. If you are looking for a plan that addresses your health insurance needs more comprehensively, consider the different Medicare supplements in Phoenix AZ.
What is Medicare?
Medicare is a nationwide health coverage program available to US citizens 65 and older, people receiving disability insurance and people suffering from specific conditions (end-stage kidney disease and Lou Gehrig’s disease).
Medicare is a four-part program. Parts A and B are referred to as Original Medicare. Part A covers costs of inpatient care in hospitals, skilled nursing or rehab facilities, whereas Part B covers outpatient and preventive care, doctor visits, ambulance services etc.
Medicare Part C, also known as Medicare Advantage, is an alternative to Original Medicare. To join, you must have Medicare A and B. Medicare Part D is available as a standalone plan and covers prescription drug costs. Parts C and D are optional and are offered by private companies.
What is not covered by Original Medicare?
Original Medicare doesn’t cover cosmetic surgery, health care outside the US, hearing aids, long-term care, most types of eye and dental care, non-emergency transportation and prescription drugs (with the exception of immunosuppressants and oral anticancer drugs). Also, policyholders need to pay the deductibles, copays and coinsurance required by Medicare.
To cover medical expenses not included in Medicare, a majority of Medicare users have some kind of supplemental health insurance, including employer or military-based coverage, Medicaid (government insurance for low-income families) or some of the different private options – Supplemental Insurance for Original Medicare (known as Medigap) and Medicare Advantage.
Choosing Medicare supplements in Phoenix AZ
When it comes to supplemental health coverage, people tend to confuse Medigap and Medicare Advantage, despite their significant differences. Medicare Advantage (Medicare Part C) replaces your Original Medicare. It is supplied by private insurance companies, which provide the full range of Part A and B benefits, under contract with Medicare.
To join Medicare Advantage, you must have Medicare Part A and be eligible for Medicare Part B. Medicare Advantage comprises several plans with different benefits. Most of them cover prescription drug expenses.
How does Medigap work?
Unlike Medicare Advantage, Medigap complements Original Medicare. As the name suggests, Medigap is designed to fill in the coverage gaps in Original Medicare. This includes copays, coinsurance, deductibles, health care abroad and hospice expenses (palliative care for the seriously ill).
To buy Medigap, you must have Medicare Parts A and B. You can’t buy Medigap if you already have Medicare Advantage, but you can drop the latter and apply for a Medigap plan before your Medicare Advantage coverage expires. Medigap plans don’t cover long-term care, eye or dental care, hearing aids, eyeglasses, or private nursing care.
When to buy a plan
The best time to buy a plan is during the open enrollment period. This term describes a six-month period that starts the first day of the month you turn 65, during which insurance companies are obligated to sell you any of the 10 Medigap plans, irrespective of your current health status or past medical history.
If you miss this opportunity, you may still buy a Medigap plan, but the insurance company has the discretion to reject you on health grounds through a so-called medical underwriting process. This is a process where the insurance company uses your health information to decide whether or not to sell you a policy.
You can cancel your Medigap by asking your provider to terminate your plan and send you a confirmation. However, your provider cannot cancel your policy as long as you pay your premiums on time, regardless of changes to your health. This is known as guaranteed insurability.
As of January 1, 2006, Medigap policies do not offer prescription drug coverage. For this purpose, you can buy Medicare Part D (Prescription Drug Plan) available through private insurers.
Medigap plans at a glance
Medigap comprises 10 standardized plans, offering different levels of coverage. Standardized means that regardless of the insurance provider or the location, the benefits offered by the 10 plans will be the same. In accordance with federal law, all Medigap plans have to be labeled “Medicare Supplement Insurance”. Each of the 10 standardized plans is designated by a letter (A, B, C, D, F, G, K, L, M, and N).
However, although the plans offered by different providers are standardized, the costs are not. This means that different insurance companies charge different premiums for the same policy, so make sure you do some research before making a decision. In Arizona, people can choose from all 10 Medigap plans. More than half of policyholders opt for Plan F, followed (albeit not closely) by Plans C, B and D.
Despite coming at the highest cost, Medicare Supplement Plan F is the most popular choice, due to its comprehensive coverage. Plan F covers 15% in excess of the Medicare-approved costs, leaving the policyholder with zero additional costs after Medicare has paid its share.
Plan C is the second most comprehensive plan. This plan doesn’t cover Medicare Part B excess costs. Both F and C don’t cover post-discharge expenses i.e. home recovery costs (drugs, rehab, medical supplies etc.).
No matter which option you choose, supplemental health coverage will significantly lower your medical expenses not covered by the traditional Medicare policy. Just keep in mind that after you choose your plan, you will also need to carefully choose the insurance company, since providers differ in the packages, premiums and coverage they offer.
Also, remember that the least expensive policy is not necessarily the best choice. Your health can change considerably in the future, actually making your currently affordable policy the most expensive one tomorrow. In any case, both Medigap and Medicare Advantage have annual memberships, which gives you the opportunity to change your mind and your plan once a year.