How to Choose a Medicare Supplement Policy
Selecting the Right Insurance Company and Coverage for Seniors
Nov 23, 2008
You already know that all Americans over age 65 may enroll in the federal Medicare program. Medicare Part A covers hospital stays, and most seniors are automatically entitled to this coverage. You may also choose to pay a small monthly premium to receive Medicare Part B, which covers some of the costs of doctor visits, laboratory tests, X-rays and other outpatient services. Nearly all Medicare beneficiaries choose to buy this additional coverage.
Even if you have both Medicare Part A and Part B, you will find that Medicare is not designed to pay all medical expenses. Medicare has deductibles and coinsurance requirements, and you have to purchase a separate policy to pay for prescription drugs. That’s why many seniors choose to buy Medicare supplement insurance – sometimes known as “Medigap” plans, since they help pay some of the expenses that Medicare doesn’t cover. These are private insurance plans not administered by the federal government.
Dozens or even hundreds of insurance companies sell Medicare supplement policies in each state, so it’s easy to get confused. If you are just about to turn 65 and are looking for a Medicare supplement plan for the first time, or if you are thinking about changing plans, it’s important to make the choice that’s right for your needs and budget.
There are 10 standard Medicare supplement plan designs, designated by the letters A through J. Plan A is the most basic policy that all seniors are automatically enrolled in at age 65. Plans B through J generally offer additional benefits. Medicare Part D, for example, is the prescription drug coverage that first became available in 2006.
The law requires all insurance companies that sell these plans to offer the same benefits. For example, a Plan B policy sold by Aetna or Blue Cross in a certain state must offer the same benefits as a Plan B policy sold by Humana or United Healthcare. You can find out more details on the 10 standard plans from your state’s Department of Insurance or the federal Centers for Medicare and Medicaid Services (CMS). Not all health insurance companies offer all 10 plans.
The differences among competing insurance companies are found in price, customer service and reputation. With that in mind, here are several points to consider as you search for the right Medicare supplement plan:
- First, decide which plan (A through J) is right for you. Use resources from your state insurance department, CMS or a reputable local insurance agent.
- Shop around. Contact representatives of several insurance companies in your area that sell the policy you are interested in.
- Evaluate premium prices. Keep in mind that the plan with the lowest premium is not necessarily the best plan for you; price should not be the only factor to consider. However, it’s a very important factor, with healthcare costs rising each year.
- Other price-related concerns:
- Check out the carrier’s “Select” network. A Select Medicare supplement policy offers a lower monthly premium to members who agree to use hospitals within a Select network. With a Select plan, you can keep your doctor, but he or she must have admitting privileges to the Select hospital. Choose a company that offers a large, statewide Select network that can save you money on premiums without severely restricting your choices.
- Ask about the insurer’s billing schedule. You may prefer to be billed monthly, quarterly or once a year.
- Look for added value. Some companies provide their customers with various value-added services, such as online health information, discounts on vision and hearing services or wellness programs.
- Customer service matters. Find out what level of service and support you’ll get from a potential carrier. You could have your Medicare supplement plan for many years, so look for a company with an exceptional reputation for customer support. Some perks to look for:
- Conveniently located offices with knowledgeable local sales and support staff to answer your questions.
- Automatic claims filing, which means no additional paperwork for you. In most cases, you shouldn’t even receive a bill.
- Toll-free telephone customer service statewide, as well as a customer service e-mail address.
- Online self-service account management that allows you to perform certain tasks 24 hours a day, such as checking claims status, changing address information or looking up a doctor or hospital.
- Reputation matters, too.Be sure that the insurance company you are considering has a reputation for strength, financial stability and longevity in the market area.
Finally, take your time when choosing your Medicare supplement plan. This is an important decision that affects your health and your financial security. Don’t hesitate to call an insurance agent more than once to make sure all your questions are answered. If you choose with care, you can feel confident that the Medicare supplement carrier you sign up with today will be at your side for years into the future.
