Agents, as you navigate through Medicare options for your clients, keep in mind there is a still-popular option out there called Medicare supplemental insurance, also known as Medigap, and it offers some distinct benefits that may fit your client better than a Medicare Advantage plan.
Why is this insurance often referred to as Medigap? Because it’s an insurance plan that fills in the “gaps” left by traditional Medicare. While original Medicare covers a significant portion of healthcare costs for seniors, your members can still be left exposed to many expenses like deductibles, copayments, and other out-of-pocket costs if they don’t have Medicare insurance.
Medicare supplemental insurance provides an extra layer of financial protection and that can be comforting.
Also, with a supplemental plan, members know their yearly medical expenses are capped at a predictable level. This makes it simpler to budget for medical costs each year.
Medicare Supplemental Offers More Choice
With a Medicare supplemental insurance plan, members can get medical care from Medicare’s huge network of doctors and hospitals across the country. With Medicare Parts A and B as the main insurance, Medicare supplemental members can visit almost any healthcare provider that accepts Medicare patients. This includes renown medical centers like the Mayo Clinic, Cleveland Clinic, MD Anderson Cancer Center, and top university-affiliated hospitals.
Medicare Advantage plans often have provider networks that are smaller and more restricted.
Medicare supplemental insurance also offers more freedom when it comes to specialists. The client has the ability to see specialists without requiring a referral from a primary care physician. This streamlines the process for beneficiaries who need specialized care from cancer doctors, surgeons, or other medical experts.
Follow the Letters for Coverage
Medicare supplemental plans are consistent throughout the United States. This consistency of plans was mandated by federal laws to promote stability and minimize confusion. Insurers cannot pick and choose which benefits to include or design their own non-standard plans. Beneficiaries can purchase a policy from any insurer licensed in their state and know they are buying into a government-defined set of coverage.
While there are 10 different standardized Medicare supplemental plans available in most states (called A, B, C, D, F, G, K, L, M, and N), the coverage provided by each plan letter are the same nationwide. Plan G, for instance, covers the same basic benefits whether you purchase it in Texas or Tennessee.
Supplemental is Often More Expensive than Medicare Advantage
The Medicare supplemental premiums can be prohibitively expensive for many beneficiaries on fixed incomes. The costs of these private insurance plans are not subsidized or capped based on income levels. A comprehensive Plan G with high deductibles can easily exceed $200 per month in some states.
For lower-income Medicare recipients, particularly those just above the subsidy thresholds for Medicare Savings Programs, paying these premiums is not possible. Insurance agents should be sensitive that while supplemental coverage is extremely useful for reducing overall out-of-pocket spending, the premiums represent a significant ongoing expense that prices out a segment of the Medicare population.
Medicare Advantage may be a better option for those with limited income.
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