How to choose a Medigap policy

July 20, 2010

Carol Teague State Health Insurance Assistance Program The Richmond Register Tue Jul 20, 2010, 11:01 AM EDT

RICHMOND — Some seniors are surprised when they learn that their red, white and blue Medicare card does not cover all of their doctor and hospital bills. One way to help with the extra costs is to purchase a Medigap policy.

Your Medicare Part A and Part B insurance is provided by the Federal government. The coverage is the same for everyone. On the other hand, for Medigap coverage, you must choose and purchase a policy from an insurance company. There are several types of Medigap policies. Each type covers a different combination of gaps left by Medicare Parts A and B.

If you think you might want to purchase a Medigap policy or to change the policy you have, you need to consider several things.

Remember first, however, that insurance companies only have to sell you a Medigap policy at certain times. You can always buy a policy if you are within six months of when you turn 65 and have Medicare Part B. Also if you are changing from another type of insurance for very specific reasons, you may be able to get a policy. Otherwise it’s up to the insurance company.

What’s the best way to compare policies?

First decide what coverage you need. If you never travel outside of the country, then you don’t need a policy with the foreign travel option. Likewise, if you always use doctors that do not charge more than Medicare allows, you do not need a policy that covers the extra 15 percent that some doctors can charge.

Each Medigap policy is assigned a letter from A to N that defines what it covers. Policies with the same letters have the same benefits. Anyone wanting to sell you a policy should tell you the letter type of that policy. The agent should also give you a chart comparing the coverage for each letter type.

What else should be considered?

Some policies restrict what hospitals and doctors you can use. They are called Select plans. Select plans usually have lower premiums. Be sure to ask your agent which policies can be used with your doctors and hospitals.

Can Medigap insurance companies charge me more than they charge my friend for the same policy?

Yes, insurance companies are allowed to set rates based on your age, gender, where you live and whether you smoke. And in some cases, they can make you wait for coverage of some pre-existing health conditions.

We all know that insurance premiums increase for various reasons, such as inflation. Some Medigap premiums will also increase just because you have gotten older, and some will not. Be sure to ask your agent about price increases.

How much will a Medigap policy cost?

The premiums vary from company to company, so shop around. The Medicare website shows premiums can range from $26 to $279 a month.

Why would I want to change my Medigap policy?

Some older policies may be very expensive for you and for the company to maintain. Also, if you’re mainly concerned about huge, catastrophic health problems, rather than routine office visits, you may want to look into a policy with high deductible and low premium. Policies that put a maximum on how much you have to pay out-of-pocket are also available.

It wouldn’t hurt to call your agent to see if you would be eligible for a less costly policy with the coverage you need. Do not, however, cancel your old policy until you are sure when and if the new one will begin and be sure to compare benefits carefully.

The Centers for Medicare and Medicaid Services recommends that you choose an insurance company that is honest and reliable. It’s also a good idea to seek unbiased advice.

Where can I get unbiased advice?

The Kentucky Department of Insurance, 1-800-595-6053 or insurance.ky.gov is a good resource. On the home page is a link to Medicare Supplement. There you can enter your age, gender, whether you smoke and your zip code. This will give you a list of insurance companies licensed to sell Medigap policies in Kentucky. By clicking on a company name, you can see an estimate of the annual premium for each type of policy.

You may also want to consult the Medicare Publication 02110, “Choosing a Medigap Policy.” This can be ordered from Medicare, 1-800-633-4277, or at www.medicare.gov. Look at the bottom of the first screen for the link to Publications.

Help with these or other Medicare issues is available through the State Health Insurance Assistance Program on Thursday mornings at the Richmond Senior Citizens Center, 1215 West Main Street.

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