Medicare does not cover all out-of-pocket healthcare costs. Private insurance companies offer supplement policies, called Medigap.
People choose a supplement company for various factors, including coverage, costs, and effective customer service. The preferred supplier in one state may not be the same across all states.
In this article, we look at Medigap and the various policies. Then we examine how the Medicare supplement plan works. We also discuss costs and list some Medicare supplement companies.
We may use a few terms in this piece that can be helpful to understand when selecting the best insurance plan:
- Deductible: This is an annual amount that a person must spend out of pocket within a certain time period before an insurer starts to fund their treatments.
- Coinsurance: This is a percentage of a treatment cost that a person will need to self-fund. For Medicare Part B, this comes to 20%.
- Copayment: This is a fixed dollar amount that an insured person pays when receiving certain treatments. For Medicare, this usually applies to prescription drugs.
Some health care costs are not covered by original Medicare. These gaps in coverage include out-of-pocket expenses such as coinsurance, copays, and deductibles.
Medicare offers supplemental health insurance policies, calledMedigap, through private insurance companies. The policies are intended to fill the coverage gaps left by original Medicare.
There are 10 different Medigap policies, When someone visits the doctor, Medicare covers the eligible amount, and the Medigap plan covers other included costs. Some Medigap plans also cover other health care costs such as travel health cover outside the United States.
Medicare standardizes the policies offered by insurance companies. However, as some companies may not all offer all plans, a person can use this tool to check what plans are available in their area.
Medigap supplement insurance policies offer standardized benefits to people with Medicare Part A and Part B. They are optional policies, and a person will pay a monthly premium in addition to the Medicare Part B premium.
Medicare uses the letters A through N to refer to the 10 available Medigap plans. However, a person who is new to Medicare cannot get Plan C or Plan F, because new Medigap plans are not allowed to cover the Part B deductible. This change was effective from January 1, 2020.
Each insurance provider can choose which plans to offer, and may not carry all 10 plans. A person can choose the plan that best suits their needs.
However, Medigap policies in Massachusetts, Minnesota, and Wisconsin are different because of state legal requirements.
Private insurance companies that sell Medigap plans have to follow Medicare state and federal regulations.
For example, a person who chooses a certain plan, such as Plan N, from one company will get the same coverage as another person who bought Plan N from a different company. The plan would also be identical in different states.
Medigap suppliers may use attained-age pricing. This means the insurance company bases its prices on the age of an individual when they start or attain the policy. The price of the premium increases as someone gets older.
The list below does not cover all companies selling Medigap policies. People can use this tool to search for Medigap suppliers in their area.
Cigna
Cigna formed in 1972 as the Insurance Company of North America. Based in Bloomfield, Connecticut, they offer other health and dental insurance besides Medigap policies. The company has more than 95 million clients globally.
Coverage
Cigna offers plans A, D, F, Plan F with a high deductible (HD), Plan G, and Plan N. They have plans in most states, except New York and Massachusetts. In Wisconsin, the plans are standardized differently.
Other Cigna companies, such as American Retirement Life Insurance, may provide coverage depending on location.
Cigna offers many customer benefits, including foreign travel emergency coverage through Plan N, and skilled nursing facility coinsurance.
The plans provide access to the Cigna Healthy Rewards program, which offers discounts on wellness products, weight-loss programs, and massage therapy.
Cigna offers additional coverage options including cancer treatments, accident expenses, heart attacks, and strokes.
Pricing structure and discounts
Cigna Medigap policy pricing depends on state laws. They offer a 7% household premium discount when at least two people enroll in a Medigap plan.
Aetna
Aetna offers health insurance, Medigap plans, dental, and prescription drug plans to nearly 40 million customers in the U.S. They have offered Medigap policies for more than a decade.
Coverage
Aetna offers plans A, B, G, and N. The company also offers premium coverage through Plan F as an F-HD plan that covers everything that Medicare does not. Aetna plans to phase out Plan F in 2020.
Plans are available in every state except the following:
- Alaska
- Connecticut
- District of Columbia
- Hawaii
- Maine
- Massachusetts
- Washington
Wisconsin standardizes the plans differently.
Aetna plans are portable throughout the U.S., so if someone moves house, their coverage remains the same. The company offers flexible coverage and does not cancel policies because of health conditions.
Pricing structure and discounts
Aetna guarantees it will not increase premiums in the first year of coverage. It also offers a 12% household discount for clients who live with at least one other Aetna Medigap insurance policy.
People can cancel their policy for any reason within the first 30 days and receive a refund.
Mutual of Omaha
Mutual of Omaha started out as the Mutual Benefit Health and Accident Association in 1909. They offer various insurance plans, including Medigap, and also banking and financial products.
The policyholders own Mututal of Omaha. They value good service, stating they pay 98% of all Medicare claims within 12 hours.
Coverage
Mutual Of Omaha offers plans A, F, G, HD-G, and N. The company offers some plans in every state, and the plans are portable across the U.S.
The high deductible Plan G offers coverage after an individual meets the $2000 annual out-of-pocket limit.
Depending on where someone lives, a company of a different name could issue the policy, such as United of Omaha.
Pricing structure and discounts
Mutual of Omaha offers limited online policy quoting. The company uses local insurance agents to gather client information and provide them with quotes for coverage.
Mutual of Omaha uses attained-age rated pricing if possible. Mutual Of Omaha offers a 12% household discount if more than one person joins a Medigap plan.
Humana
Humana offers health insurance and Medigap plans to more than 13 million customers nationwide. It is the third-largest health insurance provider in the U.S.
The Better Business Bureau gives Humana an A+ rating for their Medicare plans.
Coverage
Humana offers plans A, B, C, F, HD-F, K, L, N, and provides nationwide coverage in every state. Some states have limited plan availability.
Plans include healthy living options such as vision and dental care.
People who purchase Medigap through Humana receive additional member perks, including phone access to a nurse 24/7, access to a Humana transplant center, and discounts on other healthcare services.
Pricing structure and discounts
Humana Medigap plans vary in price according to the state. The cost of the premium depends on an individual’s location, age, gender and history of tobacco use.
If someone purchases Humana coverage from their website, there may be a small discount.
Medigap is Medicare supplement insurance policy that provides coverage for some medical expenses that Medicare does not cover.
If someone is eligible for Medicare, they should also be able to enroll in one of the 10 Medigap plans, unless they already have a Medicare Advantage plan.
Many companies offer Medigap plans. Medicare standardizes these plans in most states so the plans of the same letter provide coverage no matter which company sells them. Some states may have limited coverage.
People should choose their Medigap plan depending on their personal circumstances, coverage needs, and which company offers the most potential savings on healthcare expenses.