Glossary
Benefit period
A benefit period starts on admission to a hospital or skilled nursing facility as an inpatient, and ends at the termination of care in either facility for 60 consecutive days.
COBRA
In 1985, Congress passed a bill called the Consolidated Omnibus Budget Reconciliation Act, better known as COBRA. Under COBRA, an employee (and possibly his/her spouse and dependents) have the option to continue group coverage for a set amount of time, often at his/her own expense.
Community-rated, issue-age-rated, and attained-age-rated
With Medicare Supplement plans, the rates increase over time. Other than inflation, age is the main factor in how rates are set and how they can go up. Here are the three ways plans can be priced based on age:
Age-Attained Pricing
With this type of policy, the insurer will price the policy based on your age when you bought the plan. The premium will increase in small increments as you age.
Issue-age Pricing
Your premium is based on your age at issue and the will go up only when the carrier has a “state-wide increase.” You don’t get an annual age increase.
Community-Rated Pricing
With these plans, the base premium is priced the same for everyone in the area, regardless of age.
Creditable coverage
Individual health insurance, employer or union-sponsored health insurance, TRICARE (military retiree benefits), and more are considered creditable, i.e. legitimate, forms of coverage.
Custodial care
Custodial care is nonmedical assistance help with daily routines such as bathing, dressing, eating, or using the toilet, provided at home or in a nursing or assisted-living facility.
Extra help
Medicare beneficiaries can qualify for Extra Help with their Medicare prescription drug plan costs. The Extra Help is estimated to be worth about $4,900 per year. To qualify for the Extra Help, you must be enrolled in Medicare, have limited resources and income, and reside in one of the 50 States or the District of Columbia.
Grandfathered in
To be exempt or exonerated from a new law or regulation.
Guaranteed issue rights
Guaranteed issue rights, known also as “Medigap protections” are rights you have in certain situations that protect you from being denied a Medigap policy. In these specific scenarios, an insurance company has to sell you a policy, must cover all pre-existing conditions, and can’t charge you more for a Medigap policy because of health issues both past and present.
These special situations include:
- Your employee-sponsored Original Medicare coverage is ending
- You have both Original Medicare and a Medicare SELECT plan, and you’re moving out of the SELECT plan’s service area
- Your Medicare Supplement coverage is lost because the insurance company went bankruptllment penalties (if you missed the enrollment deadline)
- Your insurance company misled you or was not in legal compliance
- You have a Medicare Advantage plan, and the carrier has left your service area
- Your Medicare Advantage plan is no longer offered by Medicare
- You moved out of your Medicare Advantage plan’s service area
Household Discount
You get a percentage savings on your Medigap premium, ususally for 2 spouses simultanously enrolled in the same plan with the same carrier. These discounts will vary state to state and among insurers.
Loss ratio
The loss ratio is calculated by dividing all insurance losses incurred by the total number of insurance premiums collected. The lower the ratio, the healthier the insurance company is financially (and vice versa.)
Medicare Part D
Part D is the part of Medicare that provides prescription drug coverage for outpatients. It is only offered through private insurance companies that have contracts with the federal government. You need to enroll in a private Medicare prescription drug plan (PDP) or a Medicare Advantage Plan with drug coverage (MAPD) during approved enrollment periods to avoid penalties. Typically, you should sign up for Part D when you first become eligible to enroll in Medicare.
Medicare SELECT
Medicare Select is a type of Medicare supplement (Medigap) plan which has a limited network of doctors and facilities. It can be any of the lettered Medigap plans and is one of most inexpensive types of Medicare insurance.
Medicare Summary Notice
The MSN is a summary of health care services and supplies you’ve gotten over the past 3 months. They are typically sent 4 times a year (quarterly) and have a breakdown of the charges billed to Medicare, the amount paid, and the amount you’re responsible for.
Medigap Open Enrollment Period
This begins the first day of the month you turn 65 and extends for 6 months after that.
Original Medicare
Original, or Traditional Medicare consists of Part A (inpatient) and Part B (outpatient) coverage. It is managed by the federal government, offering Medicare-eligible individuals with coverage for costs incurred from doctors, hospitals, or other health care providers who accept Medicare.
Part B Excess Charge
This is the difference between what Medicare pays for a medical service and what your doctor might charge you. In most cases, a doctor will accept the Medicare-approved amount, but some will want to charge more, and this extra charge is your responsibility to pay.
Part B Surcharges
Since 2007, Medicare members with income in excess of $97,000 for individuals and $194,000 for married couples have been required to pay an income-related monthly adjustment surcharge, in addition to their monthly Medicare premiums. In 2023, most of the 60 million beneficiaries in Medicare will pay the standard Part B premium of $164.90 per month, but about 3 million high-income retirees will pay additional monthly surcharges ranging from $65.90 to $395.60 per month per person for Medicare Part B this year.
Pre-existing condition
The Centers for Medicare and Medicaid Services defines a pre-existing condition as an illness or injury that you had before enrolling in the health plan. These could be cancer, heart disease, diabetes and asthma, for example.
Standardized
Medicare Supplement plans are standardized, i.e. have identical benefits no matter where you buy them or from which insurance company. For example, Plan F in New York offered by Aetna is exactly the same plan offered by Mutual of Omaha in Oregon. The other ways they are standardized are:
- Provider’s network – Every insurer’s supplement plan has access to the entire Medicare network of doctors. Because Medigap plans are standardized, you never need to ask if your plan is accepterd; as long as the provider is in Medicare, you’re covered
- Paying claims – Automation makes claim-processing efficient and easy. Once your doctor files your claim, an intermediary company submits it to Medicare and on approval, the claim is filed with your Medigap carrier. Your doctor is paid by Medicare and the insurance company takes care of the balance. All you have to do is provide your Medicare ID and/or your Medicare supplement ID
Trial rights
Trial rights allow seniors to try a Medicare Advantage (MA) plan for a time with the option of switching to a Medicare Supplement plan. Your trial right applies when you’re trying a Medicare Advantage plan for the first time, and if you decide you don’t want the plan within the first 12 months, you have the right to dis-enroll from the plan and switch back to the Medicare supplement plan you had previously.
Still confused? Call us!
We’re here at 833-245-0614 to answer any questions, and ready to help with any issues you might have with an insurer through the enrollment process.
Table of Contents
FAQs
What are the best Medicare supplement plans?
- Best overall Medicare supplement for new enrollees: Plan G.
- Best overall Medicare supplement before 2020: Plan F.
- Best low cost Medicare supplement: Plan K.
- Best alternative to Plan G Medicare supplement: Plan N.
What is a Medicare supplement plan?
Medicare Supplement policies are private health insurance designed to cover gaps in Original Medicare. They are also known as Medigap plans. These take care of costs such as copays, coinsurance, and deductibles which can become expensive if you need regular care from a doctor or hospital. If you need medical care while traveling outside the U.S., you can buy Medigap policies to help cover those costs. As a supplement to Original Medicare, you’re required to have Part A and Part B before you canget a Medigap policy. This way, Medicare is responsible for the Medicare-approved costs of the covered care, and the remainder is covered by your Medigap plan.
What is the most expensive Medicare supplement plan?
Optimal coverage comes with higher costs, making Plan F the most expensive Medigap plan. Plan F is known as “first-dollar coverage” and it takes care of everything provided during a doctor or hospital visit. Your only responsibility is for dental, vision, medications, and equipment, such as hearing aids.
Why is Plan F being discontinued?
The Federal government ended the Plan F option for new enrollees last year to keep the healthcare system from being overused by patients who had their deductibles covered. The next best coverage after Plan F is Plan G.
Is Plan G better than Plan F?
Medigap Plan G offers every advantage of Plan F except for the deductible, which you have to cover. Because it isn’t as comprehensive as Plan F, Plan G is more affordable.
What is the best and cheapest Medicare supplement insurance?
For people who don’t go to the doctor often, Plan K is worth considering. It is the most affordable because it provides just 50% of Medicare Part B coinsurance, the Part A deductible, blood, skilled nursing, and Part A hospice costs. For comparison, Plan G and others offer full coverage of these expenses, and more.
Is Medicare supplemental insurance worth it?
It’s hard to argue against plans which cut your traditional Medicare costs. For most people, having the extra coverage these supplemental plans provide is common sense, unless they want the specific features of a Medicare Advantage plan.
Do I really need supplemental insurance with Medicare?
Most people would benefit from not having to pay out-of-pocket to stay healthy. Medicare supplement insurance or a Medicare Advantage plan offer vital savings now, but are indispensable should a catastrophic health issue occur.
What is the most popular UnitedHealthcare Medicare Supplement plan?
Of the 10 Medicare-approved Medigap plans, Plan G and Plan N are the most popular. Plan F is no longer available to new Medicare enrollees as of 2020, but it is still popular among people who bought this plan prior to 2020.
How much does Medigap insurance cost?
- Plan F$128–$342
- Plan F (high deductible)$22–$88
- Plan G$106–$325
- Plan G (high deductible)$29–$58
Who qualifies for Medigap?
Before getting a Medicare supplement plan, you need to be enrolled in Medicare Part A (hospital insurance) and Part B (medical insurance). People with Medicare Advantage Plans who want to go back to Original Medicare can buy a Medigap policy prior to switching.
Is Medigap insurance worth the cost?
The security of having lower or no out-of-pocket healthcare costs can offset the premiums you’ll have to pay for whichever Medigap plan you choose, which vary depending on the benefits offered.
How Much Is Medigap per month?
The national average cost for Medicare Supplement Plan F is $1,824 annually, which is $152/month; Medigap Plan G will cost you around $143 per month.
Is Plan G the best Medigap plan?
Since Plan F was discontinued for new enrollees as of 2020, Plan G offers the most coverage for people 65 and older. It has a lower premium than Plan F and duplicates its benefits, except for the Part B deductible.
Is it better to have Medicare Advantage or Medigap?
It depends on your specific needs, but for most people a Medigap plan is very useful in supplementing the coverage of Medicare Part A and Part B. A Medicare Advantage plan is an affordable way to get healthcare coverage not offered by Original Medicare.
What is the most popular Medicare supplement plan?
Historically, Plan F has been the most popular because it covers all the out-of-pocket costs Medicare does’t pay for. This includes the 15% extra charge billed by providers who do not take Medicare as full payment.
Does Medigap cover prescription drugs?
Since January 1, 2006, no Medigap policy came with prescription drug coverage. You have two options to get covered, enrolling in either a Medicare Prescription Drug Plan (Part D) or a Medicare Advantage plan.