Step #2 - Understand Medicare Supplemental Insurance

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Understanding The Basics
Understanding Medicare Supplemental Insurance is an important step so that you both understand what coverage you do and don't have, as well as it will help you to save money when purchasing a policy.

"Medicare Supplement Insurance" is also called "Medigap" to alleviate any confusion. Medicare Supplement Plans/Policies are designed by the Centers for Medicare & Medicaid Services (CMS), although Medicare Supplement Insurance is sold by private insurance companies.

Each insurance company that offers Medicare Supplement Insurance must offer the same exact plans and benefits, as all plans are designed by CMS. Medicare Supplement Plans are not designed by the insurance companies offering them. All Medicare Supplement Plans work the same exact way. The only difference in plans between insurance companies, is simply the price each charges.

Plans & Offerings
Currently, there are 10 plans available on the market. The 10 plans are designed in a letter system ranging from Plan A to Plan N. The ten policies that are specifically offered are: Plan A, Plan B, Plan C, Plan D, Plan F, Plan G, Plan K, Plan L, Plan M, and Plan N. Plan F, G, & N are by far the three most popular options among senior citizens today. Plan F alone has about 46% of the total supplement plan enrollment at this time.

Each of these ten policies (A-N) has a different level of coverage. Plan A has the most basic coverage, and Plan F has the most comprehensive coverage. Just because the plan "letter" increases (from Plan B to Plan C for example), does not mean that coverage will increase or decrease. Plans are simply lettered to make it easy to compare the same plan with multiple insurance companies, and know you are comparing apples to apples.

Coverage & Benefits
Medicare Supplement Plan F is most comprehensive and covers 100% of the major "gaps" in coverage left by Medicare. Supplement Plan F covers the Medicare Part A hospital co-insurance, Medicare Part B co-insurance (Medicare pays 80%, this policy pays the additional 20%), hospice care, skilled nursing facility co-insurance, Medicare Part A hospital deductible ($1,132 in 2011), Medicare Part B deductible ($162 per year in 2011), Part B excess charges, and foreign travel emergency. As you can tell, this a very comprehensive policy.

With Plan F being the most comprehensive, all other plans will have less benefits and less coverage. In addition with Plan F being the most comprehensive, it is also the most expensive. People looking for a less costly plan with comparable benefits to the "Plan F" will consider the Medicare Supplement Plan G.

Medicare Supplement Plans do not provide coverage for prescription medications. If you need coverage, you should purchase a separate Medicare Part D Drug Plan which costs on average about $30 per month.

There are 10 Medicare Supplement Plans (plans lettered A-N) all designed by Medicare. these plans are sold by private insurance companies (like Mutual of Omaha). Each company has to offer the exact same plans and benefits, but each can charge a different price. If a doctor accepts Medicare assignment, they will automatically accept payment from your Medicare Supplement company. All supplement insurance companies pay claims the same way, and most pay them electronically so you do not have to file any claims yourself.

The next step (Step #3) will help you compare and contrast the different Medicare Supplement Plans that are available so you can see what each individual plan has to offer. If you have any questions during this process, you can also call and speak with one of our Medicare Advisors at (855) 419-3826 who will provide free assistance in Medicare & Medicare Supplement education.

Continue to Step #3 | Compare

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