Many people who are close to age 65 have at least one thing to be thankful for – they’re about to start saving a lot of money on their health insurance coverage.

For many people, the cost of healthcare in their 50s and 60s is overwhelming. Even with employer-provided benefits, out-of-pocket expenses continue to grow as medical care prices rise. For example, a person with employer-provided benefits may experience increased deductibles, copayments, and coinsurance.

Now, at age 65, seniors can collect on their lifelong investment. After paying Social Security and Medicare taxes for nearly their whole life, it’s time to reap the benefits. Welcome to Medicare!

What is a Medicare Supplement Insurance (Medigap)?

Medicare Supplement Insurance (Medigap) is one of the options to fill coverage gaps in Original Medicare. These supplemental plans are issued and serviced by private insurance companies, but they must meet the guidelines set by the federal government.

For instance, CMS sets a list of minimum benefits that each plan must provide. Private companies must also follow these guidelines when issuing these plans.

Private insurance companies can set their own pricing and choose what plans they want to offer (in 2021 there are 10). However, they must offer Medicare Supplement Plan A in every state they decide to market Medicare Supplements in.

Currently, Medicare supplement plans are standardized in 47 out of 50 states. Only three states, Massachusetts, Minnesota, and Wisconsin, have customized plans.

Here are the standardized plans currently offered in 47 out of 50 states:

If you live in Wisconsin, Massachusetts, or Minnesota

Residents of Massachusetts, Minnesota, and Wisconsin have different Medicare Supplement Plans than the national standardized plans although the plans offered in each of these states fill many of the coverage gaps found in Original Medicare just like the standardized plans.

Wisconsin Medicare Supplement Plans

The Wisconsin Department of Health Services has created an online tool for people to design their own Medigap Plan. With it, you can build a custom plan that will provide the same level of coverage as the standardized plans F, G, and N (also known as Medigap).

Massachusetts Medicare Supplement Plans

Rather than offer the traditional standardized plans, Massachusetts state officials have developed the “Core” plan plus an additional two supplements that they feel will satisfy the needs of the residents in their state.

Minnesota Medicare Supplement Plans

Healthcare Expenses that Medicare Supplements Will Not Cover

Even though Medicare Supplement (Medigap) plans were designed to fill the gaps in Original Medicare, there are some important healthcare services that they will not cover:

• Outpatient Prescription Drugs – For prescription drug coverage you will need to buy the Medicare Part D coverage.
• Dental, Vision, and Hearing – Although these are considered very important healthcare services, Original Medicare and Medicare Supplements will not provide this coverage. If you feel these coverages are very important to you, we recommend that you take a look at Medicare Advantage.

How does a Medicare Supplement Plan Work?

Medicare Supplement (Medigap) plans are designed to “supplement” your Original Medicare Part A and Part B. As such, you cannot purchase a Medicare Supplement plan unless you’re enrolled in Medicare Part A and Part B (Part D is optional).

Physicians and hospitals that accept Medicare will also accept your Medicare Supplement plan.

The plan works by filling in the coverage gaps found in Original Medicare so your doctor will send your bill to Medicare who will pay their share and then send the remaining balance (if any) to your Medicare Supplement provider.

Unlike Medicare Advantage coverage (Medicare Part C), Medicare Supplement plans do not require that you only use healthcare providers in a network or have a primary care physician.

For example, if you are a resident of Texas and have Medicare Supplement Plan G, and are admitted to the hospital, Original Medicare would pay for your services except for your Part A deductible ($1,484 in 2021). The deductible would, however, be covered by your Medicare Supplement plan G along with your Part A coinsurance if you were to remain hospitalized for more than 60 days in a benefit period.

Moreover, regardless of the Medicare Supplement plan you choose, it must cover all or some of the following services:

• Medicare Part A coinsurance costs up to an additional 365 days after your Medicare benefits are exhausted
• Medicare Part A hospice care copayments or coinsurance
• Medicare Part B (outpatient and doctor visits) copayments and or coinsurance
• The first 3 pints of blood used in a medical procedure

When Can I apply for a Medicare Supplement Plan?

Medicare open enrollment periods are the best time to enroll in Medicare Supplements. They last six months and begin on the first day of the month you’ve turned 65.

A Medicare Supplement Open Enrollment Period is vital because it gives people the opportunity to sign-up for insurance that might otherwise be denied.

Insurance companies are not permitted to use medical underwriting during this time, which takes into account your current health and your health history. This is known as your “guaranteed issue right.”

If you delay enrollment and miss your open enrollment period, an insurance company may charge you more due to health issues or decline providing coverage.

Can I Enroll in a Medicare Supplement Plan if I’m Under 65?

In many states, yes, you can. Although the federal law does not require states to offer Medicare Supplements to individuals who are under 65 and qualify for Medicare because of a disability or certain diseases, many states will allow you to do so.

Check with an independent Medicare Specialist regarding your state to find out if you qualify for a Medicare Supplement under age 65.