February 22, 2021
If you’re researching Medicare and looking for a video to help you understand Medicare supplement plans and if they are the right choice for you. This is the video you need to see. Medicare supplement plans explained.
Hi I am Matthew Claassen with Medicare Seminars Insurance Agency. We are an independent insurance broker helping people with their Medicare and retirement needs from Hawaii to Virginia and Alaska down to the Florida Keys. We represent our client’s best interest, not any insurance company, and our services are free to the consumer. All you need do is ask.
Let’s get started.
As you know from my Medicare Explained video, before you make any other decisions with Medicare you must first be enrolled in both Medicare Part A (inpatient services) and Medicare Part B (outpatient services). This is referred to as Original Medicare. From there you can make one of three choices.
Your first choice is to do nothing. Just keep Medicare Part A and Medicare Part B (aka Original Medicare) as your insurance coverage and add Medicare Part D prescription coverage. Of course, with just Medicare Part A and Medicare Part B and no other coverage, a person still has unlimited financial risk should you get sick or injured. Your portion of the medical cost could still result in financial hardship.
Most people are justifiably uncomfortable with having unlimited financial risk in the case of a medical event.
If you have a pen and paper handy there is an important Medicare insurance term you should be aware of. That term is your annual Maximum Out-of-Pocket expense, fondly referred to as your MOOP. Your MOOP is the most money you will be liable for in medical bills for in-patient or outpatient services during any calendar year. Once you have reached your plan’s MOOP, you have 100% insurance coverage for the remainder of the calendar year. It’s a great way to measure the coverage of one health insurance plan versus another. The plan with your lowest MOOP has the most insurance coverage because your financial risk is the lowest.
It’s important to know that your MOOP never includes the cost of prescriptions drugs. Prescription drugs are separate. And your MOOP resets every January 01.
So, your first choice is to do nothing. Just keep your Medicare Part A and Medicare Part B. If you do, you have no MOOP, your financial risk is unlimited. Your other two choices are there to limit your MOOP so you have a defined and manageable risk.
Your second option is to increase your insurance coverage by purchasing additional insurance. You do that by enrolling in a Medicare supplement plan and use that coverage in addition to Medicare Parts A and B. When you have a Medicare supplement plan, Medicare pays first then your supplement pays all or some of what’s left.
A third option is to trade in your Medicare Part A and Medicare Part B for a Medicare Advantage Plan. To be clear, a Medicare Advantage Plan is not a Medicare supplement. It does not supplement your Original Medicare, it replaces it. You still must pay your Medicare Part B monthly premium to Medicare, but you are no longer using Original Medicare. You don’t use your red, white and blue Medicare card. The insurance company you choose for a Medicare Advantage plan will issue you their own insurance card for the plan you enrolled in. I have a separate video called Medicare Advantage Plans Explained if want to learn more and see if they re right for you.
According the Kaiser Family Foundation research, more than seven out of ten people enrolling in Medicare choose either option one (keeping just Medicare Parts A & B) or option two; adding a Medicare supplement as secondary insurance with Medicare Parts A & B being their primary insurance.
The first question you might have is; Why? Why choose to add a Medicare supplement plan to your Medicare Part A and Medicare Part B?
The reason is simple; With a Medicare supplement plan you, the Medicare beneficiary, get to keep all the benefits of Medicare while limiting your financial risk in the case of a medical event.
The next obvious questions you may be asking then is “What are the benefits of Original Medicare that we get to keep when we enroll in a Medicare supplement plan?” and “By how much can I limit my financial risk?”.
There are two major benefits of Original Medicare that you keep when you get a Medicare supplement.
Medicare’s intent is to cover everything that is Medically Necessary. It’s not like other insurance products where they list out what is covered and leave you guessing what isn’t on the list. With very few exceptions, if it is Medically necessary Medicare’s intent is to cover it. How does Medicare determine Medical Necessity? They ask your doctor. This too is unlike other insurance products. In most any other insurance you may have had in your lifetime, it’s the insurance company that makes a final judgement over what is or is not covered. Insurance companies don’t ask your doctor. This is huge. With Original Medicare, you and your doctor control your healthcare. Not an insurance company. That’s the first benefit.
The second benefit of Original Medicare you get keep with a Medicare supplement is that you can see any doctor or go to any hospital in the United States or its territories. You have national coverage. As long as they accept Medicare, your insurance will cover you. There is no limiting Network and virtually every doctor and hospital in the country and its territories accepts Medicare.
For most people, those two simple benefits are the most important features of their healthcare. You have freedom of choice, choosing any doctor or hospital available, and you have control over your healthcare because your doctor never has to get their recommended procedure or tests pre-approved by an insurance company. That is why more than 70% of the people starting Medicare today keep Original Medicare as their primary insurance.
I should note, preventive care is run slightly differently. Preventive care is allowed on a specific schedule set by Medicare. Some preventive care tests can be completed annually, some every other year and so on. With preventive care, your doctor can order a test not covered by Medicare. I have another video specifically on that subject called Avoid Surprise Medicare Bills. It’s an important video for everyone on Original Medicare and it’s linked in the top corner of this video.
See more about Medicare supplement plans here: Medicare Supplement Plan Benefits & Hidden Risks
I’s also important to understand that a Medicare supplement plan is a guaranteed renewable contract. What does that mean? It means that your benefits can never change. They are guaranteed. Once you have a Medicare supplement plan no one can cancel your coverage. No one can change your benefits. You have that plan and the benefits it offers as long as you pay your premium. Not even an act of Congress can change your plan or take it way from you. They can change it for people in the future who do not yet have a supplement, but they can’t change yours.
This is why you do not have an annual election period or open enrollment period for your Medicare supplement plan. Those annual periods are only for those parts of Medicare with benefits that change annually. Medicare’s position is that if the benefits change annually, you should have the right to shop for a new plan annually. Since your Medicare supplement benefits never change, there is no need for an annual election period. You have no NEED to re-shop your plan during an annual election period.
Instead, you can re-shop your plan any day of the year, 365 days a year. You just have to qualify medically to do so.
If you wish to change Medicare supplement plans outside of an initial or special enrollment period, the insurance company has the right to look at your medical history and deny you coverage if there is a recent history of critical or chronic illness. That is referred to as medical underwriting.
More on that later…
Now we know the benefits of Original Medicare that are passed on to a Medicare supplement. The next question to answer is “By how much can a person limit financial risk?”.
There are more than 10 Medicare supplement plans to choose from, but there are usually only three or four whose price and benefits are worth considering. Within those options you can limit your financial exposure to medical bills down to zero or just a few hundred dollars per calendar year. Or limit your financial risk to approximately $2,500 in any calendar year when looking at the one of the two High Deductible Medicare supplement plans.
Think about that. With a Medicare supplement plan you have national coverage. You can see any doctor, go to any hospital in the entire country as long as they accept Medicare. Plus you and your doctor control your healthcare, not an insurance company. And, you can limit your financial risk, your annual maximum out-of-pocket for medical bills, your MOOP I mentioned earlier, down to near zero.
One point of confusion is with the Medicare supplement plan benefit table and the your Maximum Out-of-pocket. Your MOOP. So let me take a moment to clear up that confusion.
That is why so many people, especially people who take the time to research their choices, choose a Medicare supplement plan.
Learn about Medicare Advantage plans here: Medicare Advantage Plans Explained
The next question you may be asking yourself is;
First, understand that all these plans are good plans. The medical benefits of each Medicare supplement plan are written into Social Security law so they do not vary from one insurance company to another. In addition, none of the Medicare supplement insurance companies has any say in what is or is not covered or how much is paid. Medicare calls the shots and makes all decisions.
It works like this:
You go to a doctor and they copy both your red, white and blue Medicare card and your Medicare supplement card. But, the doctor only bills Medicare. Medicare pays its portion and sends an electronic communication to your Medicare supplement plan instructing them on what too pay, who to pay and when. The Medicare supplement insurance company simply does as instructed. If, after these payments, there is still money due. It must be a copay or deductible your Medicare supplement plan does not cover by design. That would be the amount you owe.
So, in choosing a Medicare supplement plan you need to ask yourself how much insurance do you want, and how much you can afford.
The Medicare supplement plan that is right for you is the one that fits both your needs and your budget.
I have videos on each of the Medicare supplement plans you should consider. Simply subscribe to my channel to find the videos comparing Medicare supplement Plans G and Plan N and so on. You will find them in my “New to Medicare” play list.
Prices on Medicare supplement plans can vary by 100% or more from one insurance company to another and from one state to another. For example, the price of a Medicare supplement plan for a 65-year old in New York or Miami can cost three times more than the same plan in Virginia or the Carolina’s.
The same can also be said between insurance companies. There is no difference in Medicare benefits between one insurance company and another, but there is a big difference in insurance companies. Choosing the right insurance company is important.
I have a video that goes over this subject of insurance companies in detail and gives examples. The video is called Medicare Supplement Plans / Benefits & Hidden Risks and I have linked it just above my left shoulder. Go to the 23 minute 45 second mark of that video and listen from there. You will be glad you did. 23:45 mark of the Benefits & Hidden Risks video (point up)….But not right now. You’re not done here yet.
The next thing you need to know about Medicare supplement plans is that many states have created laws that override Medicare to the benefit of the consumer. Some states have annual special enrollment periods. Some states outlaw certain Medicare charges, which favors one plan over another and so on. These laws can impact your decision on which Medicare supplement plan is right for you.
Trying to find out if your state has specific laws can take hours of internet sleuthing. I know, I’ve done it. But, to make it easy for you we include a couple paragraphs discussing your states rules, if there are any, in our email to you whenever you request a Medicare supplement plan quote from us. Use or free Medicare supplement plan quote request and we will provide you that information for free.
Next from this Medicare supplement plans explained video, you will want to understand enrollment periods. The enrollment period for a Medicare supplement plan is different than the enrollment period for any other part of Medicare. That’s important.
First, you can enroll in a Medicare supplement plan months before it is to start. You are simply getting the process out of the way. In most states you can enroll up to six-months ahead of time. In some states it’s no sooner than 90-days before your actual birthday, other states 60-days.
But, this is what’s important; your Medicare supplement initial enrollment period lasts for six-months and starts the day your Medicare Part B becomes effective. That initial enrollment period is when you can get any plan available to you without any medical questions. Regardless of your health, you can get any plan at the best price it’s offered.
For example, if your Medicare Part B starts on July 01. Right in the middle of the year. In most states you can apply and get the application process completed starting the previous January 01 and you can still apply without any medical questions asked up to December 31. That gives you the entire year to complete the process, no medical questions asked. No one can deny you coverage.
After you have been on Medicare Part B for more than six-months you can still apply for a Medicare supplement plan any day of the year. You can switch plans, switch insurance companies, do anything you want as often as you wish. However, in order to do so you must qualify medically. The insurance company you are applying to has the right to deny your request if your current or recent medical history includes serious critical or chronic illness. They can deny your request. In which case you just keep what you have.
Three important points to build on this. One is don’t assume your condition, if you have one, will disqualify you. You can be two years cancer-free or had open heart surgery 10-years ago and still qualify. Every insurance company has a different set of underwriting guidelines. We help with this, so just ask. Two, an insurance company is very likely to request underwriting even if you are changing plans within the same insurance company. That is standard. If your insurance company says they will let you switch plans at any time without underwriting, be careful of what they are not saying. What the are not saying is “at what price”. Don’t assume it’s at the same price as if you qualified medically. It’s not. Those companies have a separate price and it’s much higher for people who switch plans without underwriting. I know, I work with these companies.
Third; there is no annual election or open enrollment period for Medicare supplement plans. The Annual Election and Open Enrollment period pertain only to Medicare Advantage Plans and Medicare Part D prescription drug plans. Of course, some states have special rules. As I mentioned earlier.
Lastly; in most states you can become subject to a period of pre-existing conditions when switching Medicare supplement plans. This confuses a lot of people. So please understand it is very easy to avoid any pre-existing condition clause because one of two conditions must exist before you can be subject to pre-existing conditions. You must have a gap in Medicare coverage of at least 63-days or, if you try to switch Medicare supplement plans without holding on to the first plan for at least six-months. One of these two conditions has to apply after your Medicare supplement plan initial enrollment period in order to be subject to a preexisting condition.
There are even further restrictions but it’s too much for this video. That is something that is best consulted one-on-one if you have a concern.
So, there it is. Medicare supplement plans explained. Your next step is to either check out my Medicare Advantage Plans Explained video or one of the other videos I mentioned earlier and linked above.
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