Texas Medigap Made Easy
Medicare Supplemental Insurance, also known as Medigap, helps fill “gaps” in Original Medicare coverage. These policies are sold by private insurance companies and they can help pay some of the remaining healthcare costs like copayments, coinsurance and deductibles. You’ll pay a monthly premium for this coverage. (Note: You will still need to purchase separate prescription drug coverage.
Medicare is the health insurance program provided by the U.S. government (and administered by the U.S. Centers for Medicare & Medicaid Services (CMS)) to U.S. citizens who are 65+ (plus permanent residents with more than 5 years continuous residency). People under 65 with certain disabilities may also qualify.
Original (or Traditional) Medicare refers to Medicare Parts A & B, which are administered directly by CMS.
Part A covers inpatient hospital-related services, skilled nursing facilities and in limited circumstances at-home and emergency care.
Part B covers medical services and supplies that are medically necessary to treat your health condition. These services include doctor visits, lab tests, outpatient care, preventive services, ambulance services, immunizations, & necessary equipment like wheelchairs.
Original Medicare covers 80% of Part A & B costs, but it does not cover prescription drugs (otherwise known as Part D) or any other medical services.
If you don’t enroll in Part B when you’re first eligible, or if you drop it and enroll again later, you may have to pay a late-enrollment penalty for as long as you have Medicare.
Medicare Supplement Insurance (also called Medigap) helps senior and disabled Texas residents pay for certain Medicare copayments, deductibles, and other costs. Currently, insurance companies can offer state residents up to 10 standardized Medigap plan options: Plans A, B, C, D, F, G, K, L, M, and N.
Medicare Supplement Insurance Pricing Methods
Medigap pricing methods are important because they dictate how your premiums may increase in future years. There are 3 different pricing methods:
- Attained-age rated: The premium increases as you age
- Issue-age rated: The premium is based on your age when you buy and it may increase due to inflation and other factors, but not due to your age
- Community rated: The same premium is charged to all Medigap policyholders
An Explanation of your Medicare out-of-pocket costs
- Part A coinsurance and hospital costs
Medicare Part A requires you to pay coinsurance costs for your inpatient hospital care after you meet your Part A deductible. Each of the standardized Medigap plans available in 2021 offers full coverage of Part A coinsurance costs.
- Part B coinsurance and copayments
When you use Medicare Part B for covered outpatient care and medical items, you are typically required to pay 20% of the Medicare-approved amount for the services or devices you receive (after your meet your Part B deductible). Each type of Medigap plan offers full or partial coverage for your 2021 Part B coinsurance and copay costs.
- First three pints of blood
Medicare requires you to pay for the first three pints of blood you may need for a transfusion. Medicare will then pay for additional blood that may be needed in your procedures. Each Medigap plan provides full or partial coverage for the costs of your first three pints of blood.
- Part A hospice care coinsurance and copayments
After you meet your Part A deductible, you are typically responsible for certain coinsurance and copay costs if you receive hospice care. Each Medigap plan offers at least partial coverage for these coinsurance/copay costs.
- Part A coinsurance for skilled nursing facility
If you receive inpatient care in a skilled nursing facility, you will typically be responsible for paying Part A coinsurance costs. Medigap Plan C, Plan D, Plan F, Plan G, Plan K, Plan L, Plan M, and Plan N each provide full or partial coverage for your Part A coinsurance costs in a skilled nursing facility.
- Medicare Part A deductible
You must pay the Medicare Part A deductible out of your own pocket before your Part A coverage kicks in. The Part A deductible is not an annual deductible, which means you could potentially have to pay it more than once in a single year. In 2021, The Part A deductible is $1,484 per benefit period. Medigap Plan B, Plan C, Plan D, Plan F, Plan G, Plan K, Plan L, Plan M, and Plan N each provide full or partial coverage for your Part A deductible in 2021.
- Medicare Part B deductible
You must pay the Part B deductible out of your own pocket before your Part B coverage kicks in. In 2021, the Part B deductible is $203 per year. Medigap Plan F and Plan C both cover the Part B deductible in full. Medicare beneficiaries who become eligible for Medicare on or after January 1, 2020, will no longer be able to enroll in Plan F or Plan C. If you enroll in either plan before 2020, you will be able to keep your plan. If you are eligible for Medicare before January 1, 2020, you may be able to enroll in Plan F or Plan C after that date if either plan is available where you live.
- Medicare Part B excess charges
If you visit a health care provider that does not accept Medicare assignment, this means that they do not accept Medicare reimbursement as payment in full for their services. These providers are allowed to charge you up to 15% more than the Medicare-approved amount for their services. You are responsible for paying these costs out of your own pocket. Medigap Plan G and Plan F both cover Part B excess charges in full.
- Foreign travel emergency care
Medicare only covers the cost of emergency care received outside of the U.S. and U.S. territories under limited circumstances. Medigap Plan C, Plan D, Plan F, Plan G, Plan M, and Plan N each cover 80% of the costs for the covered emergency medical care you receive when traveling abroad.
Remember: Plan F and Plan C are not available to beneficiaries who become eligible for Medicare in 2020 or after.
Below are the specific types of Medicare-related expenses that Medicare Supplement insurance policies may cover:
- Part A hospital care coinsurance
- Part A hospice care coinsurance or copayment
- Part B coinsurance or copayment
- First 3 pints of blood
- Part A deductible
- Part B deductible*
- Part B excess charges
- Skilled nursing care
- Foreign travel emergency care
The bold items in the list are the expenses covered by all Medicare Supplement insurance plans. The other items may or may not be covered, depending on which Medigap plan option you choose.
* The only plans that cover the Part B deductible are Plan F and Plan C. If you become eligible for Medicare on or after January 1, 2020, neither of these plans will be available to you.
Since each plan is different, it’s important to understand which benefits are included in the Medigap policy you plan to buy.
Shanelle Reyes has been a Texas licensed insurance agent since 2008. Her specialty for several years was selling life insurance where she enjoyed helping families plan for the future.
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* A licensed sales agent may call or e-mail as a result of completing the information to discuss Medicare Advantage, Prescription Drug Plans or Medicare Supplement Insurance.
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