Things to consider when choosing a Medicare Supplement (Medigap) plan in South Carolina
When deciding to enroll in a Medicare Supplement plan, also known as Medigap plans, there are several things you should consider. But before we get into what is the right plan for you, I want to give you an overview of what a Medicare Supplement plan is, and how it works.
South Carolina Medigap plans are different from Original Medicare (Part A and Part B) and Medicare Advantage plans.
They are a type of health insurance you buy from a private company. South Carolina Medigap Plans work alongside Original Medicare and help pay health care costs not covered by Original Medicare, things like co-payments and deductibles. A Medicare Supplement policy is different from a Medicare Advantage Plan (like an HMO or PPO) because those plans replace your Medicare benefits, while a Medigap policy only supplements your Original Medicare benefits. In South Carolina (and the rest of the country) Medicare Supplement plans are standardized and labeled A through N. Each of these plans offers different levels of health coverage, but since they are standardized, the benefits provided in a Plan G for example, are the same no matter which insurance company you buy it from. You can find a chart that outlines the benefits of each plan on the Medicare website here.
So when can you enroll in a South Carolina Medicare Medigap Plan?
Once you turn 65 and sign up for Medicare Part B you have an open enrollment period that lasts six months from the first day of the month of your 65th birthday. If you are still working when you turn 65 don’t worry, you can still keep the health insurance provided by your employer and enroll later. During your open enrollment period, you can buy any Medicare Supplement policy without going through medical underwriting. This is called guaranteed issue (GI). If you try to buy South Carolina Medigap Plans outside the open enrollment, guarantee issue window, you may not be able to get coverage or may pay higher rates. There are a few exceptions to that rule which is why it is so important for us to understand your specific situation to help make the best financial and coverage decision for you. In South Carolina, you have several insurance carriers to choose from which is a part of the decision I will help you with as well.
When choosing a physician it is always important to ask them if they accept Medicare Assignment if you have a Medicare Supplement Plan.
When a health care professional accepts Medicare assignment, they agree:
- to be paid directly by Medicare
- to accept the payment amount Medicare approves and not bill you for excess charges (more on this below)
- not to bill you for more than the Medicare deductible and coinsurance
One of the biggest potential gaps in Original Medicare is the ability for healthcare providers to bill you for something called excess charges if they don’t accept Medicare Assignment.
They may still accept you as a Medicare patient but by not accepting Medicare Assignment they are allowed to bill you for excess charges. So what are excess charges and why is it important to understand them? Medicare “Excess Charges” are related to Medicare Part B services. If you are on Medicare and go to a doctor who does not accept Medicare assignment (accept full payment by Medicare), they are allowed to bill you up to 15% above and beyond what Medicare approves for a specific procedure/doctor office visit. This amount is not covered by Medicare or any of the Medicare Supplement plans except for one. Plan G covers Excess Charges at 100%.
For example, if a doctor decided a $1,000 payment (Medicare-approved amount) for a service is not enough, the doctor is allowed to charge up to an additional 15% over and above the Medicare-approved amount and you would be responsible for paying that 15%. So for a $100 service, you could be responsible for a $15 Excess Charge. Doesn’t sound like much right? But what if you had a serious health issue and the charges were $1,000 or $10,000? 15% of that might make for a tough bill to pay. The uncertainty around Excess Charges is why the Medigap Plan G is a popular one, with Excess Charges covered at 100%.
While we are talking about things NOT covered by Original Medicare it is important to know that neither Original Medicare nor Medicare Supplement plans cover prescription drugs.
To have prescription drug benefits you will also have to purchase a prescription drug plan, also known as a stand-alone Part D plan, from an insurance company as well. There are a lot of factors to consider when choosing a Part D plan but we will cover that in another post.
Why would you consider purchasing South Carolina Medigap plans?
There are several reasons:
- Medicare Supplement policyholders can see any provider in South Carolina or any other state who accepts Medicare and no referrals are needed like may be required in a Medicare Advantage plan.
- Medicare Supplement policies are guaranteed renewable which means even if you have health problems, as long as you pay your premiums on time the insurance company can't cancel that policy.
- With standardized plans, the options are less confusing. That makes it a whole lot simpler to figure out which plan is best for you.
- Medicare Supplement policies typically have lower out-of-pocket expenses than a comparable Medicare Advantage plan.
Choosing a Medicare plan is an extremely personal decision and every person’s situation is different and unique. There is no right or wrong choice, just what’s right for you.