As Medicare original part A and B don´t cover all costs, private health insurance companies offer supplemental plans, which cover these costs that you would otherwise have to pay out of your own pocket. The premium rates for these plans vary on the type that you choose. Plans who cover more benefits tend to be more expensive and the ones covering less will also cost less. Which of these options is best really depends on the individual and their personal situation. While to some it´s important to have a supplement plan that covers everything, others find this to be necessary and would rather want a different type of security.
There are two available Medicare supplement plans, that have an out-of-pocket limit; plan L and supplement plan K. This means, that your costs for medical care in one year can only reach that firmly set limit. Everything you might require and that might cost above the limit you had already paid for the year, will be covered by these supplement plans. This is a great way of additional insurance for those who don´t really need to have full-coverage, but also want to avoid very high costs, for example in a case of an emergency surgery.
Medicare Supplement Plan K
In 2018, the Medicare supplement plan K limit was at 5,240$. There are benefits that are covered up to 50%, however after reaching this limit and depending on the case, the supplement plan K should cover the expenses to a 100% after having reached the limit. The benefits covered by supplement plan K are:
- Costs for Medicare Part A deductible
- Costs for Part A coinsurance or copayment, due to hospice care
- Costs for skilled nursing facility care coinsurance
- Costs for Medicare Part B copayment or coinsurance
- Costs for first three pints of blood, necessary for a medical procedure (per year)
What Medicare Supplement Plan K doesn´t cover?
Bevor and after reaching the set limit, there are certain expenses that aren´t covered by Medicare supplement plan K at all. This is important to keep in mind, as should you be looking for a plan that covers exactly these expenses, plan K is not be the best option for you to lower your medical care expenses. The plan K doesn´t cover:
- Medicare part B deductible
- Medicare part B copayments
- Prescription medication
- Vision screenings
- Hearing aids
Depending on the health insurance company, the cost for Medicare supplement plan K can vary. While health insurance companies don´t get to individually decide what benefits the plan covers, they are allowed to set their own prices for the plan. This can start at around 500$, with the highest premium for the Medicare supplement plan K laying at around 2000$. Also, prices may and can vary from individual to individual. Another thing to keep in mind is that this standardization is applied in 47 states only. Citizens of Massachusetts, Wisconsin and Minnesota have different standardizations. This Medicare supplement plan is also only available to those who are
So many years in a row, out of all ten available advantage plans, the advantage plan F has been the best-selling one. The majority of people choose to enroll to this plan, one of the main reasons being, that is covers pretty much everything! Once enrolled to this plan, all you will need to pay for is the premium cost of the plan monthly, along with the cost for the original Medicare Part A or B. This is a benefit that many value, because it gives you the freedom of getting the health care services you might need without having to worry about what it will cost. There are no hidden expenses and no surprises: you pay your insurance monthly and know that whatever comes your way medically, you are covered. So, why is it being discontinued?
In 2015, Congress discussed about passing a legislation, that will outlaw selling plans who cover the 183$ Medicare part B deductible after the 1st of January 2020 (or on this day). The reasoning behind it was, that because people enrolled to these plans don´t have to pay for anything additionally, they visit the doctor´s office even more often than necessary. The belief is, that if a small amount still needs to be paid, many will reconsider going to the doctor and the number of patients visiting only due to, for-example, flu-like symptoms will be greatly reduced. The benefit in this is for Medicare itself, if there will be less doctor´s visits (ones, that are considered to be unnecessary), the expenses will also decrease. There have been many opponents and many arguments against this. One of the main arguments being, that Medicare advantage plan F is also the most expensive one and people are paying for their right to get the health care they believe to be necessary, whenever they want to. Despite all the arguments that the opponents have presented, the legislation passed and will come to force in 2020. This new legislation will not only affect the advantage plan F, but the advantage plan C as well. As both these plans pay for the deductible Medicare part B, they will no longer be sold.
If you are already enrolled to plan F, you are probably thinking: what should I do now? Does this mean that I need to look for a new advantage plan? You can be at peace, as people who are already enrolled in the plan can continue using its benefits even after 2020. Many are nonetheless worried, that once the plan is discontinued, the premium rates will drastically increase, as there will be less new members paying for it, while the existing members will only get older and older. While you can still switch before this even happens, you can also wait and see whether this predicament really comes true. Some states allow for the members to switch policies without any underwriting for a window of thirty days after their birthday.
Generally, your gender, age, your zip code & if you consume tobacco factor into the amount you’ll be paying for the Medicare Supplement plan. The fact is, a few individuals end up paying way more amount as compared to others to benefit from the same coverage. So, you don’t want to depend on the words of your insurance company. Rather, know how everything works so that you get the best price available for your coverage.
Supplemental insurance plans are divided into 10 unique packages starting from letter A through N. Meaning in order to change your benefits, you’ll need to pick a plan with a new letter.
The insurance agencies do charge their own prices for each of these plans. So, it’s important that you get the quotations from a number of companies to elect the most ideal one. This is where online websites come in handy. They offer estimates on plans from a number of companies in addition to offering personal assistance for comparing each of these plans.
Medicare supplement plans have different prices depending on 3 unique models. So, even if you pick the lowest one, it might not benefit you as you expected since you’ll have less likelihood to swap the plans in case your health declines over time. When a person turns 65, he/she is guaranteed to get the regular rate without any exclusions or increase for current health problems through an open enrollment period. However, the most economical coverage when you reach the age of 65 might not offer the best price 10 years later.
The pricing structure that increases monthly premiums depending on the person’s age is called as Attained Age Rated. It might seem tempting at first since it actually does provide economical rates. However, it can be a big risk on your part since the premium tends to rise not only depending on the inflation rate but also because you grow older day by day.
Another pricing structure is mentioned as Issue Age Rated, however, it is not that common. In this, the pricing is dependent upon the person’s age when he/she applies for the plan and the premium don’t rise simply because the person gets older. Although the rates might rise as a result of inflation.
A 3rd pricing structure seems to be quite popular since it isn’t based on your age. Rates can remain unchanged for everybody in a designated location irrespective of their gender, age or even in case they eat tobacco. The premium may start out higher than the previous pricing models though.
It might not be easy to know which pricing structure is applied within your locality. Finding a broker who is ready to assist can definitely help.