6 Truths about Medicare Supplement Insurance Plans

What You Need to Know

Medigap plan benefits are standardized.
Clients can suspend their coverage.
Clients who qualify for Medicare early get a Medigap open enrollment period around the time they turn 65.

As we all know, health care can be very expensive, particularly if you don’t have the right protections in place to help manage any unexpected out-of-pocket expenses.

For many individuals covered by Medicare, the thought of being responsible for 20% of all their medical expenses can be nerve-wracking.

To help alleviate this burden and give beneficiaries more peace of mind, brokers and financial advisors can inform their clients about Medicare supplement Insurance, or Medigap, which offers financial predictability by helping to cover some of the out-of-pocket costs Medicare does not cover — including deductibles, coinsurance and co-payments.

Medicare supplement plans are sold by private insurance companies and are designed to work with Original Medicare, which is administered by the federal government.

There are many plan options offered by multiple health insurance companies, often making the decision feel overwhelming.

Here are six hidden truths about Medicare supplement Insurance that can help your clients make an informed decision and select the plan that best fits their individual needs and preferences.

1. Medigap plans are standardized.

Unlike other types of insurance where benefits differ from company to company, all Medigap plans with the same letter designation offer the same benefits — regardless of the insurance provider.

For example, a Medigap Plan G from one insurance company will offer the same benefits as a Plan G from another company.

2. You can suspend a Medigap policy for up to 24 months.

In certain situations, Medigap policyholders may become eligible for Medicaid or may return to employer coverage if they bought the Medicare supplement Insurance policy under age 65.

In these cases, there is an opportunity for your client to suspend the Medicare supplement insurance policy for up to 24 months.

This means the policyholder can temporarily stop paying the premium, and the policy will not be canceled.

Once the suspension period ends, the policy can be reinstated without the client going through the underwriting process again.

3. Medigap plans do not provide coverage for individuals enrolled in a Medicare Advantage plan.

Medigap only pays secondary to Original Medicare as the primary coverage.

Clients who enroll in a Medicare Advantage plan, managed by private insurance companies, can only buy a Medigap plan if they are returning to Original Medicare.

4. Pre-existing conditions may affect coverage.

Individuals with pre-existing conditions may be subject to medical underwriting when applying for a Medigap policy.

This can make it more difficult to get coverage.

5. State resources provide free assistance.

State Health Insurance Assistance Programs, or SHIPs, are state-based resources that provide free and unbiased information, counseling and assistance for Medicare beneficiaries and their families.

These services are available to individuals regardless of income or insurance status.