Medicare does not pay for everything — here’s how to fill in the gaps
Medicare, the federal health insurance program that benefits more than 4.8 million people in Florida, helps pay for a variety of medical costs.
But there are many expenses — like co-insurance, co-payments and deductibles — that basic Medicare (called Original Medicare) does not cover. Co-insurance is the percentage of costs a patient pays after meeting the deductible, while co-payments are a charge for each time a patient uses a service, typically visiting a doctor. The deductible is a portion each patient pays before health insurance kicks in.
Medicare also does not cover most dental care, eye exams for glasses, hearing aids, long-term care and routine physical exams, among other things.
Medigap — or a Medicare Supplement Insurance — is a separate plan supplied by private insurance companies that helps pay some or all Original Medicare costs, and offers additional benefits.
Original Medicare covers people who are 65 or older, individuals under that age with certain disabilities and people with end-stage kidney disease who need dialysis or a renal transplant.
Enrollees in Original Medicare are covered by two sections: Part A, which pays for in-patient hospital care plus some other services, and Part B, which covers visits to doctors, outpatient care, medical supplies and preventive medicine, such as vaccines.
READ MORE: As you turn 65, you must figure out Medicare — even if you plan to work beyond that
Medicare does not pay for everything
But Parts A and B do not pay for all an individual’s normal medical costs, or exceptional emergency expenses.
Within the world of Medicare, there are a variety of options to enhance coverage and help reduce out-of-pocket costs. Medicare Advantage plans (Medicare Part C), offered by private insurance companies, deliver almost all the same benefits as Parts A and B, but also offer additional coverage for routine vision, hearing, prescription drugs, dental and fitness programs. But you have to go to the doctors and facilities in those plans.
Some Medicare recipients buy the Medicare Part D Prescription Drug plan, which helps cover costs of some prescription medications. Medicare enrollees also can obtain drug coverage through a Medicare Advantage program.
READ MORE: Deciding whether Medicare Advantage plans are right for you
Medigap option
Another option is Medigap — or a Medicare Supplement Plan — which helps pay some or all Original Medicare costs Private health insurance companies offer Medigap policies and charge monthly premiums.
Some Medigap plans also provide coverage for individuals who suffer a health emergency while traveling abroad and for costs in a skilled nursing facility.
Medigap — as its name suggests — fills in payment gaps in Original Medicare, and the right type of policy may provide financial relief to Medicare patients. Medigap plans help reduce out-of-pocket costs incurred under Medicare Parts A and B, and can supply other benefits.
There are some conditions, though: You can only buy Medigap if you have Medicare Parts A and B. In addition, policies are available only to an individual, not to a couple or family, and you cannot obtain a Medigap plan if you are covered by Medicare Advantage.
Also, there is no prescription drug coverage with Medigap, and premiums can reach several hundred dollars per month, depending on the age of the individual and the items covered.
Most people enrolled in Part A do not pay a premium for hospital services. Everyone enrolled in Part B — visits to doctors, tests, outpatient care, etc. — must pay a minimum monthly premium of $170.10 (deducted from Social Security payments). But the premium increases according to income levels.
Alphabet soup
Like most things related to healthcare, Medigap is not simple. For example, companies in Florida offer an alphabet soup of 12 Medigap alternatives including Medigap Plans A, B, C, D, F, F-high deductible, G, G high-deductible, K, L, M and N.
But three of the 12 (Plans C, F and F-high deductible) are not available to anyone who turned 65 on or after Jan, 1, 2020, or to some people under 65. But once a Medicare recipient obtains a Medigap policy, it will be valid as long as the individual pays Part B and Medigap premiums, even with health problems.
The plans offer a variety of alternatives — with or without coverage — for costs associated with skilled nursing facilities, deductibles for Parts A and B, excess charges and foreign travel emergencies. They also stipulate different deductibles, copays and premiums. No plan pays for the standard Part B premium of $170.10.
According to Medicare.gov, Medigap Plan G will provide a 65-year-old female who doesn’t use tobacco with coverage for skilled nursing facilities, the Part A deductible, Part B excess charges and a foreign travel emergency (but not the Part B deductible) and zero cost (“generally”) for approved co-pays/co-insurance related to Part B services. The holder of this policy will have a zero cost Part A deductible and a $233 Part B deductible.
She will pay premiums between $203-$403 per month. Monthly premiums for a 67-year-old male who doesn’t use tobacco range from $253 to $397 for the same plan.
The lowest monthly premium of all 12 Medigap plans available in Florida for the same age level is $65 (female) and $75 (male) for high-deductible plans. The highest monthly premium was $481 (female) and $530 (male).
What to look out for
Evaluating and choosing Medigap plans is complex, and people considering Medigap for the first time may need to find assistance. (See list of help centers below.)
Medicare, the Florida Office of Insurance Regulation, specialized health information centers and insurance companies offer online comparisons of plans, coverage and costs. Some South Florida insurance companies have walk-in information offices.
Aside from the plethora of plans and coverage levels, there are also complications related to enrollment periods, penalties, pre-existing conditions and conflicts when people with Medicare Advantage plans want to switch to Medigap coverage.
“While it is often touted that people can switch freely between Original Medicare and Medicare Advantage, consumers are not always aware that they may not always be able to purchase a Medigap policy if they don’t enroll during certain time periods,” said Jane Sung, senior strategic policy adviser with AARP’s Public Policy Institute, in an email responding to Miami Herald questions.
“Federal law allows people to purchase Medigap without medical underwriting when they first enroll in Medicare. They also have federal protections that let people try out a Medicare Advantage plan for up to one year and still return to Medigap or enroll in Original Medicare and purchase Medigap,” she said.
“But outside of these specific time periods, insurance companies may be allowed to require medical underwriting to purchase Medigap, which means it can be more expensive.”
Medical underwriting means that an insurance company evaluates your health when applying for health insurance. That way, they can decide if they will offer coverage, what limits or exclusions would apply and what to charge for premiums.
Medicare’s website says that the best time to purchase a Medigap policy is during the six months that starts the first month you have Medicare Part B and are 65 or older. During this period, a buyer generally obtains more choices and better premiums, and a person can purchase any Medigap policies that are available in Florida even with pre-existing conditions, according to Medicare. After this period, the policy cost may be higher due to current or past health problems.
People who work full time beyond 65 can delay signing up for Medicare Parts A and B if the individual (or spouse) is receiving group healthcare coverage at work and the company has more than 20 employees.
When the job or coverage ends, there is a special enrollment period during which they can sign up for Medicare with no penalties. At that time, they are also eligible to enroll in Medigap or Medicare Advantage (but not both) with no penalties.
How to get help understanding Medigap, Medicare
▪ Medicare.gov
https://www.medicare.gov/medigap-supplemental-insurance-plans/#/m?year=2022&lang=en
▪ Medicare Handbook — Medicare & You
https://www.medicare.gov/medicare-and-you
▪ Alliance for Aging Miami
Main: 305-670-6500/Elder Helpline: 305-670-HELP
Toll free: 1-800-96-ELDER (35337)
▪ SHINE (Serving Health Insurance Needs of Elders)
1-800-96-ELDER or 305-671-6536 in Miami and the Keys
https://www.floridashine.org/
▪ Center for Medicare Advocacy (CMA)
Phone: 860-456-7790
▪ Florida Office of Insurance Regulation (FOIR)
https://www.floir.com/sitedocuments/medigapfaqs.pdf
▪ Insurance brokers and health insurance companies such as AARP/UnitedHealthcare, Florida Blue, United American Insurance Co., Bankers Life, Humana and others.
Sources: Medicare.gov, Kaiser Family Foundation (KFF), AARP, Florida Office of Insurance Regulation (FOIR), Florida Blue, Center for Medicare Advocacy (CMA), Alliance for Aging, Inc., Healthinsurance.org
