Medigap Coverage

Original Medicare covers hospital and doctor services. It is a program run by CMS “The Center for Medicaid and Medicare Services,” (i.e. the Federal Government) and is available to those over 65 or with certain disabilities. While Medicare is a tremendous healthcare program, it does have “gaps” in coverage. These gaps are in the form of additional fees for deductibles, coinsurance, uncovered days, and the 20% patient responsibility.

How to Seal the Medicare Gap

As there is no ceiling or maximum for this patient liability, these fees can lead to medical bankruptcy in the event of a catastrophic illness or injury. This lack of a safety net is where Medicare Supplement or “Medigap” plans fit in. Medigap or Medicare Supplement Plans are sold by private insurance companies. A Medigap plan reduces the exposure to limitless fees. It is best seen as a way to manage expected and unexpected costs of healthcare. That previous lack of a cost ceiling now has a definition. The definition is the price of the premium for the policy.

Types of Medigap Plans

The scope of safety provided by a Medigap plan depends on the type of plan selected. There are a range of plans designated by letters, with some of the more popular plans being A, F, G, N and F High Deductible. These plan types are all different but each type is equal. As in all F plans are the same. Medigap policies are acquired through independent insurance companies. Each company sets the price at which the plan is being sold, and this can differ within the same letter plan. Though the price can vary, the coverage for each letter plan remains the same. Our brokers have access to insurance provided by a variety of these independent companies, allowing us to use the lowest-cost policy.

Selecting the Right Medigap Letter Plan for You

As stated earlier, these plans are named by letters. And as an example Medigap Plan F covers all costs not covered by Part A and Part B 100%, including the deductibles, there are no additional out of pocket expenses for the insured. With Plan F, the subscriber knows the premium is the maximum limit of expenses in a year. Other letter-named plans cover differing percentages of additional costs, so there is some variability in annual costs, but still the safety net is there. Our brokers match the letter plan with your needs to find the best protection for you against planned and unplanned health care costs.

There are portions of healthcare that Medigap plans do not provide coverage for. These generally include long-term care, as in a nursing home, vision, dental care, hearing aids, eyeglasses, or private duty nursing. Medigap runs alongside medicare Part A (hospital services) and Part B (general physician services) to pay out where they fall short. Medigap also does not cover prescription drugs. A separate Part D Prescription Drug Plan (PDP) is needed if the insured wants assistance, or safety net for drug costs.

Prescription Drug Plans (PDP)

In Original Medicare, your basic health services are covered by both Medicare Part A (Hospital) and Part B (Physician and Outpatient). The Federal Governmental agency the Center for Medicare and Medicaid Services (CMS) operates this. Part D (Prescription Drugs), on the other hand, is operated by private companies — often insurance companies or drug companies — who have contracts with Medicare.

Should You Enroll in Part D?

While Part D programs are voluntary, you may be penalized should you not enroll in a Part D drug plan when first eligible to do so. You can enroll in a Part D plan when you have Part A, Part B, or both Part A and Part B. The premium can be automatically deducted from your Social Security or Railroad Retirement benefit check or paid through your checking account. If you have low income, you may be eligible for “extra help” from Social Security and can submit an application on their website. If you receive “extra help,” it may reduce or eliminate any late enrollment penalty that you have and reduce the cost of your prescription drugs, reduce the cost of your drug plan premium, and eliminate the coverage gap.

Part C: Medicare Advantage

If you get your Medicare services through Part C, Medicare Advantage, these plans usually have a part D plan included in them. Therefore, you are automatically enrolled in a Part D Prescription Drug Plan when you enroll in a Part C or Medicare Advantage Plan with Drug Coverage.

CAUTION: Sometimes Part C plans do not include a drug plan. These plans may or may not permit you to enroll in a stand-alone Part D Prescription Drug Plan. Our Brokers can guide you here. Trying to navigate this on your own could result in the cancellation of your Part C plan when you add a Part D plan.

Use the Government Plan Finder to Compare

To accurately assess the best drug plan, it is critical that you provide a list of your current drugs to your broker, and that your broker enter your drugs into plan finder. Plan finder will use all the algorithms that Medicare employs to analyze drug prices and plans available to you and will develop a list of plans that are rank ordered to best suit your needs. It is, of course, dependent upon the interpretation of the expertise of your broker to explain the plans to you, so that you can make a decision about which plan would be best.

There seems to be a large amount of nomenclature to become familiar with around drug insurance plans. And this barrier is fairly well-bridged as one looks into options, so do not be daunted at first as the learning curve seems steep to most, but it is within reach of all.

Deductibles and Drug Tiers

First, a few notes about starting costs, using words that are a little more familiar to folks. for Part D drug plans, deductibles — the portion the insured pays before the policy takes effect — are capped at $415 for the year 2019. Some plans have a $0 deductible and some plans have a deductible that is less than the $415 permitted by Medicare. Some plans have a $0 deductible for Tier 1 and 2 drugs but a $415 deductible for Tier 3, 4, and 5 drugs. There’s another new term: tier. All of the prescription drugs have been divided into tiers. Each plan can divide its tiers in different ways. Each tier costs a different amount. Generally, a drug in lower tiers will cost you less than a drug in a higher tier.

The premium for Part D prescription drug coverage is independent and in addition to the premium for Part B.

Some drugs are not covered on some plans. Formulary (also likely a new term) is the list of covered drugs for each plan and offers generic options as well as brand name drugs. Formulary will play a significant role in plan selection as the cost of specific drugs not on the formulary will be priced to the consumer at retail.

We will search for plans where all drugs are on the client’s formulary.