What Is Medicare Supplement Insurance?
A Medicare Supplement Insurance policy, is a policy sold by certain private companies that will help pay some of the health care costs that original Medicare does not cover like insurance co-payments, coinsurance, and insurance deductibles. Some Medicare supplement policies offer coverage for additional services that original Medicare does not cover such as medical care when you travel outside of the U.S. If you have original Medicare and you buy a Medicare supplement policy, Medicare will pay its portion of the Medicare approved amount for covered health care costs then your Medicare supplement policy pays its portion. A Medicare supplement policy is different from a Medicare Advantage Plan. Those plans provide Medicare benefits while a Medicare supplement policy only provides a supplement to your original Medicare benefits.
8 things to know about Medicare supplement policies.
- You must have Medicare both Part A and Part B.
- If you have a Medicare Advantage Plan, you can apply for a Medicare supplement insurance policy, but do make sure you will be able to leave the Medicare Advantage Plan before your Medicare supplement policy begins.
- You pay the private insurance company a monthly premium for your Medicare supplement policy in addition to the monthly Part B premium that you pay to Medicare.
- A Medicare supplement policy only covers one person. If you and your spouse both want Medicare supplement coverage, you will each have to buy an individual/separate policy.
- You can buy a Medicare supplement policy from any insurance company that is licensed in your state to sell the product.
- Any standardized Medicare supplement policy is guaranteed renewable even if you have health problems. This means the insurance company can not cancel your Medicare supplement policy as long as you pay the premium.
- Some Medicare supplement policies sold in the past cover prescription drugs but Medicare supplement policies sold after January 1, 2006 are not allowed to include prescription drug coverage. If you want prescription drug coverage, you can join a Medicare Prescription Drug Plan (Part D).
- It is illegal for anyone to sell you a Medicare supplement policy if you have a Medicare Medical Savings Account (MSA) Plan.
Medicare supplement policies don’t cover everything.
Medicare supplement insurance policies generally do not cover long term care, vision care, dental care, hearing aids, eye glasses, or private duty nursing.
Insurance plans that are not Medicare supplements.
Some types of insurance are not Medicare supplement plans. They include:
- Medicare Advantage Plans (like an HMO, PPO, or Private Fee-for-Service Plan)
- Medicare Prescription Drug Plans (Part D)
- Employer or Union plans which include the Federal Employees Health Benefits Program (FEHBP)
- Veteran’s benefits
- Long-term care insurance policies
- Indian Health Service, Tribal, and Urban Indian Health plans
Dropping your Medicare supplement policy (not just the drug coverage).
If you decide to drop your Medicare supplement insurance policy, be careful about the timing. For example, you might want a completely different Medicare supplement policy (not just your old Medicare supplement policy without the prescription drug coverage). Or, you may decide to switch to a Medicare Advantage Plan that offers prescription drug coverage. If you drop your Medicare supplement policy and the drug coverage was not creditable prescription drug coverage, or if you go 63 days or more in a row before your new Medicare drug coverage begins, you have to pay a late enrollment penalty when you join a new Medicare drug plan.