COLUMN: What to know about Medigap insurance

People who are new to Medicare, and many who’ve had Medicare for years, find the insurance aspect confusing. That can be especially true of Medicare supplement insurance, or Medigap for short.
Medigap is robust insurance, it’s relatively costly and its rules worth knowing. Let’s use a Q&A format to uncover answers to key questions.
If these answers raise further questions, a Senior Health Insurance Benefits Assistance (SHIBA) volunteer counselor can help. If you would like to make a SHIBA appointment, please see the end of this column.
For whom is Medigap insurance the best fit?
- These are national policies, so someone who travels a lot would have coverage in Michigan, say, if she can make an appointment with a medical professional who bills Medicare.
- Likewise, most Medigap policies cover 80% of emergency medical costs outside the country during the first 60 days of travel.
- Medigap Plan G may be right for beneficiaries with high medical costs because, combined with Medicare’s payments, it covers all Medicare-approved medical treatments and services except for the $240 annual Medicare Part B deductible.
- Another category is people who may be in good health, can afford the premiums and simply want robust coverage.
What does Medigap coverage cost?
For a 65-year-old Medicare beneficiary who lives in Salem and doesn’t use tobacco, the monthly premium would be about $140 for Medigap Plan G. Medigap covers only medical expenses, so one also needs separate prescription drug insurance.
Where will one find Medigap policy information?
For benefits of the 10 Medigap policy types now available to new Medicare beneficiaries, see pages 38-39 of the Oregon Guide to Medicare Insurance Plans. Plan G is the strongest policy type available to new beneficiaries. Plan N is less expensive and much like Plan G, although the insured would have doctor copays of up to $20 per visit as well as a $50 copay at the hospital emergency room.
How does one find Medigap premiums?
A SHIBA Medicare counselor can help, or you can find them yourself on the Medicare.gov website. There, when you are asked the type of insurance in which you are interested, click on Medigap policy.
For a list of all companies selling Medigap policies in Oregon, see pages 40-41 of the Oregon Guide. Here you will find company phone numbers and websites, as well.
Can anyone enroll in a Medigap policy?
During the first six months that beneficiaries have Medicare Part B, they have guaranteed issue to enroll in a Medigap policy. Guaranteed issue means the company must sell the policy and it cannot levy a premium surcharge because of a pre-existing condition.
After that, an insurance company can refuse to sell a policy or, because of a pre-existing condition, may levy a premium surcharge. The surcharge can be shed, however, using Oregon’s Medigap birthday rule.
If I’ve missed the period for guaranteed issue, will I be asked health questions?
Yes, although companies may vary somewhat in the questions’ rigor. Again, if you can enroll in a policy but are paying a surcharge, learn the benefits of Oregon’s Medigap birthday rule.
Do all doctors accept Medigap insurance?
Most will, but it’s important to ask. For Medigap to work, the doctor must be willing to bill Medicare. That’s because Medicare first pays its share of your medical bill, after which the Medigap policy is billed.
Does PERS offer Medigap insurance?
Yes, the Public Employees Retirement System has several Medicare insurance plans, of which a Medigap policy is one. This insurance is available to Oregon public employees (state, cities, counties, school district, etc.) although only when they first have Medicare. PERS Medigap is a hybrid that also includes prescription drug coverage, which isn’t true of policies purchased on the open market. It’s worth comparing costs and benefits of Medigap coverage from PERS and the open market. PERS representatives can be reached at 503-224-7377.
How does Medigap compare with Medicare Advantage insurance?
You saw a Medigap premium quote earlier; by contrast, Medicare Advantage (MA) insurance can cost as little as nothing (that’s because Medicare subsidizes the premium for beneficiaries regardless of income).
MA plans never ask health-related questions. With an MA plan you can expect a copay for most medical treatments and services; pre-authorization may be required for certain procedures, and a referral may be needed to see a specialist.
Medigap will cover only what Medicare does, whereas MA insurance may have extra benefits such as gym memberships, an annual dental allowance, a quarterly allowance for over-the-county pharmacy items, medical-alert devices and such. For a comprehensive comparison of Medigap policies and MA plans, please see pages 48-49 of the Oregon Guide.
My parents live elsewhere in Oregon, and each year are faithful about reviewing their options for Medicare insurance. But you’ve written that some Medicare insurance covers medical only. My folks need drug coverage, too. If they change plans, how can they avoid making a mistake?
From your question, it’s clear that you’re referencing Medicare Advantage insurance, and that your parents use the Medicare website to compare insurance plans.
The simplest answer to your question is to ask them to find the words, “Includes: Health & drug coverage.” They will see this filter at the top of the item that shows them each of the insurance plans. Avoid plans that say instead, “Includes: Only health coverage.”
To avoid a mistake, it’s a good idea to use the filters on the Medicare.gov website. Once you’ve entered your information and have reached the page that delivers details about the insurance plans, near the top find the words, “Filter by.” Then look across the screen and select the filter that says “Drug coverage” (from left to right, it’s the third filter) and select the option you want.
That you raised the question suggests that you might like to help with this. If you both have a desktop computer, laptop or tablet, you could use Zoom or the phone to look at the options together. Besides helping your parents, it could also give you an introduction to the insurance aspect of Medicare.
If you would like to make an appointment with a SHIBA volunteer counselor, or to ask a question to be answered here, please see below.
Jim Sellers of Salem is a certified Medicare counselor with the Senior Health Insurance Benefits Assistance (SHIBA) program. To ask a question to be answered in this column, e-mail [email protected]. To schedule a free SHIBA phone, Zoom or in-person appointment with a volunteer Medicare counselor, call 800-722-4134.
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