Medicare Supplement – Medigap

Medicare supplemental insurance, also known as Medigap, is a type of health insurance that is designed to cover certain expenses that aren't covered by the Original Medicare Plan. In New York State, Medigaps are sold through private insurance companies, such as UnitedHealthcare (UHC). In addition to enhancing your financial security by limiting your out-of-pocket expenses, the NYS Medicare supplement plans allow you to keep your doctor and hospital and to choose your own specialists and other health care providers. This is not possible with Medicare Advantage, which forces you to use doctors that are in a particular network.

Medigaps are designated by the letters A through N. Plan A is the core package, while Plans B, C, D, F, G, M, and N each differ according to their benefits but include all of the benefits of Plan A. Plans K and L offer catastrophic coverage only, and Plans E, H, I, and J are no longer available to new enrollees.

Before they turn 65, or before they go on Medicare, many people have a health insurance plan that requires them to pay a coinsurance, which is usually a percentage of the service fee after the deductible has been paid. With such plans, there's an annual out-of-pocket maximum that the insured must pay before the insurance company will start paying for 100% of the covered claims for the year in question.

With Medicare, however, there is no out-of-pocket maximum. The Original Medicare Plan covers only 80% of your health care costs, so the remaining 20% that you must pay on your own can add up over time and place you in a financially vulnerable position. Investing in a Medicare supplemental insurance policy solves this problem by covering out-of-pocket costs that aren't paid by Medicare, such as copayments and deductibles.

Most states have a six-month open enrollment period, but as a New York resident, you can take advantage of the state's continuous open enrollment. You're also entitled to obtain a Medigap policy without being subject to medical underwriting. In other words, the insurance companies cannot ask you intrusive questions about your health status, medical history, or claims experience to determine your eligibility or calculate your monthly premium. For this reason, New York is known as a guaranteed-issue state when it comes to Medicare supplemental insurance.

New York is also a community-rated state, meaning that Medigap premiums are the same for everyone, regardless of age or health status. The premiums do, however, vary according to where you live (Manhattan, Brooklyn, Queens, the Bronx, or Staten Island), so your broker will ask for your zip code before showing you a list of available Medigap plans in NYC. The only other eligibility requirements are that you're already covered by Medicare Plans A and B and that you live in the service area. It may be possible to get Medigap in NYC if you're under 65, but only if you have certain disabilities (end-stage renal disease, for example) and are enrolled in Medicare Plans A and B.

Medigap premiums in NY also vary among insurance providers, and not all companies choose to offer all plans. The New York City Business Group can quickly identify the cheapest Medicare supplement insurance for you based on your location, coverage needs, and what would make the most financial sense now and over the long term

Our service package includes first comparing Medicare Advantage (Part C) and Medigap (Medicare Supplement) and then checking to see if your doctors participate with the plan that you're considering. It's important to note that you cannot have Medicare Advantage and Medigap at the same time, so comparing the two in detail is a crucial step in the process.

You could spend a Sunday afternoon wading through the charts at the New York State Department of Financial Services website and do your own Medigap plans comparison, but we have access to privileged information that we have compiled over many years – our own library, if you will, of Medigap and Medicare Advantage health insurance data from various sources. We'll share this information with you either in-person or over the phone. Best of all, this is a resource that will be valuable for years to come. As healthcare continues to reform, we will be there to discuss the changes and how they impact you.

In addition to discussing the differences between Medigap and Medicare Advantage, we will check your prescriptions to confirm that they're included in the formulary list of the plan in question. Then we look at the monthly cost and present you with a doctor and Rx report. If that's agreeable to you, we complete the enrollment forms for your signature and submit your application to the insurance company. We follow up in a few days for your approval and ID #.

After that, we're available to discuss anything with you, whether it's three weeks, three months, or three years after you enroll with us. We do not just enroll you in a plan and say, "Good luck." We're available for you for the next 30 years. For instance, you may want to call us if you have a doctor that you must see and that doctor does not participate with the plan your currently enrolled in. Our job will be to help you find a plan that this doctor participates with and help you switch plans through a special enrollment period (SEP).

Another reason why you may want to call us is if you have an Rx that is very expensive, we can check if that Rx is cheaper on any other Part D health plan's Rx formulary list, or perhaps see if you qualify for state programs like Elderly Pharmaceutical Insurance Coverage (EPIC) or federal programs like Low Income Subsidy (LIS). We'll help you understand the benefits and guidelines of these programs and, if you qualify, help you enroll and save you hundreds of dollars on your prescriptions every month.

Nationwide, the most popular Medigap policy is Plan F, not because it's the most comprehensive, but because the insurance broker stands to get the highest commission by recommending this policy over one that might be more appropriate for his or her client's situation. In New York State, however, the popularity of Plan F is not in line with the rest of the country. The reason for this is that the premiums in NYS are much higher than in other states, due to the state's policy that every senior resident is eligible for Medigap, no matter what his or her current health or medical history is.

It's also important to be aware that Plan F is going away on January 1, 2020. If you get Plan F now, you'll be able to keep it when 2020 rolls around, but here's the problem: you probably won't want to keep it. In 2020, Plan F will be a so-called "closed group," meaning that the people in your area who all have Plan F through the same insurance company will be part of the same group.

The unfortunate reality is that, as time goes on, the group will get smaller because its members will either pass away or leave the group for a different plan. As a result, insurers will have no choice but to keep raising the rates because there will be fewer premium dollars coming in to support the claims. This is exactly what happened when Plan J was taken off the market in 2010