Medigap policies, also called Medicare Supplement policies, are sold by private insurance companies to fill in the gaps left by original Medicare. There are 12 standard plan options and about 11 different insurers to choose from in New Jersey. With the wide range in options, this article will help you decide if a Medigap policy is right for you and how to choose the best option.
What does a Medigap Policy Cover?
Medicare Part A (Hospital Insurance) and Medicare Part B (Medical Insurance) do a pretty good job in covering you for medical services, but they still leave people exposed to deductibles, coinsurance and copays.
In 2012, Medicare Part A has a $1,156 deductible that resets every 60 days, and Part B has an annual deductible of $140. For Part B, once the deductible is met, you then pay a 20% cost sharing for your services.
A Medigap policy will help you pay those deductibles and coinsurances so you can avoid large claims exposure. These plans are also accepted anywhere that Medicare is accepted so they work seamlessly accross the United States.
When is the best time to buy a Medigap Policy?
The best time to buy a Medigap policy is during the guaranteed issue period, but you can purchase or switch plans at almost any point in time.
Guaranteed Issue Period
The guaranteed issue period lasts for six months and starts on the 1st day of the month in which you turn 65 or older and you are enrolled in Medicare Part B. During this time period, insurance companies cannot use medical underwriting to determine your rate or deny your acceptance.
After the guaranteed issue period, you can still buy a policy but companies can use your medical history to adjust the rate or deny coverage.
Which is the best plan option? Plan F, G and N!
With 12 standardized plans, it can be tough to narrow down the choices. I think the best are Plans F, G, and N.
- Plan F is the most comprehensive plan with almost all services covered 100%
- Plan G is the same as F except you are responsible for the annual Part B deductible
- Plan N will be the lowest premium of the three, and you will have to pay your Part B deductible as well as a $20 copay at your physician.
Things to Keep in Mind
Like most health insurance, premiums will tend to go up as you get older so make sure that you will be able to afford your plan in the future as the price increases. Once the guaranteed issue period is over, you can be rejected for new coverage so be prepared to stick with your first choice.
Plan G – in many cases is more than $140 less per year than Plan F, so this is a good value. If you can save $300 in premium and only have to pay an extra $140, you win.
Plan N – is a good mix between low out of pocket costs to you and low premiums.
What companies sell Medigap in NJ?
The New Jersey State Health Insurance Assistance Program provides a list of the available companies in NJ. List of NJ Medigap Companies
Choosing a Medigap Company
The plans are all standardized, so Plan F with one company will have identical coverage to another company’s Plan F. How I like to compare the companies:
- Reputation of the company
- Past rate history, if you can get it. Do they consistently have high increases year to year?
- Do they medically underwrite if you are out of your guaranteed issue period?
- Do they offer any discounts?
If you have any questions on choosing a Medigap policy, I am happy to help out. You can reach me at http://www.newjerseyinsuranceplans.com.
I also recommend you use these resources below: