Do you know your Alphabets...for Medigap Plans? Let's Look at Plan A!

Do you know your alphabets...for Medigap Plans? Before you answer that question, we want to make sure you know what is a Medigap Plan. A Medigap Plan is another name for a Medicare Supplemental Plan. This Plan helps fill in the gaps or pay for the costs that Original Medicare (Medicare Part A and Part B) does not cover. These costs include the following: coinsurance, deductible and copay amounts. However, Medigap Plans do not cover the following: Long term care, vision or dental services, hearing aids, eyeglasses or private duty nursing. Remember, you cannot be enrolled in a Medicare Advantage Insurance Plan if you are enrolled in a Medigap Insurance Plan.

In our previous post, we discussed that Medigap includes the following Plans: A, B, C, D. F*, G *, K, L, M, and N. Plans F and G are high deductible plans. We will talk about these plans in detail in an upcoming post.

According to the research provided by the Congressional Research Service dated May 12, 2023, "there are afforded protections to Medigap insurance plans purchasers who are at least 65:

• Guaranteed Issue Protections. During the initial six-month open enrollment period for new beneficiaries, insurers cannot refuse to sell an individual any Medigap policy that the insurer offers. Plans cannot exclude coverage for preexisting health conditions, and insurers cannot charge more based on an individual’s health history. Medicare beneficiaries also have some guaranteed issue protections after their initial open enrollment period, including

  • the ability to buy a different plan following changes in residence or employment, in which they are forced to change plans,

  • “trial rights” to switch from Medicare Advantage to Original Medicare and obtain a Medigap policy within the initial year of enrollment, and

  • “no fault rights” that allow a beneficiary guaranteed issue if an insurer no longer offers an enrollee’s plan or has misled an individual. Some states have additional open enrollment rights according to state law.

• Guaranteed Renewal. The insurer cannot cancel a Medigap plan as long as the beneficiary remains enrolled and pays the premium".

Here are some important facts about Medicare Supplemental Insurance, provided by AHIP (formerly American Health Insurance Plans), --this information was published in February 2023:

• "Between December 2017 and December 2021, original Medicare enrollees who purchase Medicare Supplemental coverage increased from 35% to 40%.

• Medicare enrollees with Medicare Supplemental coverage were 3 times less likely to have problems paying medical bills compared to enrollees without Medicare Supplemental policies".

Now, that we know a little bit more about Medigap Plans, let's look at some facts about Medigap Plan A:

• All insurance companies that sell Medigap insurance must offer Plan A.

• It covers 100% of Medicare Part A (hospital Insurance) coinsurance and hospital costs (up to an additional 365 days after Medicare benefits are used)

• It covers 100% of Medicare Part B (Medical Insurance) coinsurance or copay

• It covers blood (first 3 pints)

• It covers 100% of Medicare Part A hospice care coinsurance or copay

However, Medigap Plan A does not cover the following:

• Part A Deductible,

• Part B Deductible

• Medicare Part B excess charge (the amount a doctor or other health care provider is legally permitted to charge is higher than the Medicare‑approved amount--the difference is excess charge)

• Foreign Travel Emergency

Based on the above study conducted by AHIP, there were a total of 14,592,068 Medicare enrollees in the Medigap Plans in December 2021. During this time, 92,828 or 1% of the enrollees were in Plan A. The state of Maryland had 4,729 enrollees and the state of North Carolina had 2,022 enrollees in the Medigap A Plan.

If you are currently working and getting ready to retire, you may want to enroll in a Health Savings Account (HSA) with your employer. Although you cannot continue to contribute to an HSA account once you are enrolled in Medicare, you can use the money you saved for Medicare deductibles, co-pays and coinsurance not covered by Medigap Plan A or some other Medigap Plans. Of course, this important underlined point relates to retirees that still have savings in an HSA account as well.

We hope this information is helpful. We look forward to discussing Medigap Plan B in our next post! Have a great weekend!

"Excellence resides in quality, not in quantity. The best is always few and rare; much lowers value." ~ Baltasar Gracian.

Resources:

• 2023 Choosing a Medigap Policy: A Guide to Health Insurance for People with Medicare

• AHIP: The State of Medicare Supplement Coverage: Trends in Enrollment and Demographics

• Medigap Background and Statistics, Congressional Research Service, 5/12/2023

• Internet Pillar Quotes