Medicare is a federal health insurance program that pays most medical expenses for people age 65 and older. It will also pay for medical care for some people under the age of 65 who have disabilities.
You can buy Medicare supplement insurance to help pay some of your out-of-pocket costs that Medicare doesn’t pay. Because it helps fill in some of the coverage gaps, Medicare supplement insurance is often called Medigap insurance.
Do you need a supplement for Medicare?
Not everyone needs a Medicare supplement policy. If you have other health coverage, gaps in coverage may already be covered. You probably don’t need Medicare supplement insurance if:
- You have group health insurance through a current or former employer, including government or military retiree plans.
- You have a Medicare Advantage plan.
- Medicaid or the Qualified Medicare Beneficiary (QMB) Program pays your Medicare insurance premiums and other out-of-pocket costs. QMB is a Medicare savings program that helps pay for Medicare insurance premiums, deductibles, copays, and coinsurances.
If you have other health insurance, ask your insurance company or agent how it works with Medicare.
Basic information about Medicare
Original Medicare has two parts. Part A covers hospital services, while Part B covers other types of medical expenses. You can go to any doctor or hospital that accepts Medicare. Medicare supplement policies only work with original Medicare.
Medicare Part A (hospital coverage) pays for
- inpatient services;
- skilled nursing facility care after a hospital stay;
- home care;
- hospice care; Y
- all blood except the first three pints for each calendar year.
Medicare Part B (medical coverage) pays for
- medical expenses;
- home health care;
- laboratory services;
- outpatient treatments in a hospital;
- durable medical equipment and supplies; Y
- Preventive medical services, including exams, health screenings, and immunizations.
Medicare Part D (prescription drug coverage) pays for brand-name and generic prescription drugs. You can get prescription drug coverage by either joining a stand-alone prescription drug plan or buying a Medicare Advantage plan that includes drug coverage. If you have group health insurance, your health plan may already cover prescriptions. Ask your plan sponsor if the plan has prescription drug coverage comparable to Medicare Part D.
Insurance companies approved by Medicare offer Part D coverage.
The Centers for Medicare and Medicaid Services (CMS) publishes the Medicare & You handbook that describes Medicare coverage and health plan options. CMS mails the handbook each year to all Medicare beneficiaries. The handbook is also available by calling 800-MEDICARE (800-633-4227).
Services that Medicare does not cover
- Most long-term care. Medicare only pays for medically necessary care provided in a nursing facility.
- Custodial care, if it is the only type of care you need. Custodial care can include help with walking, getting in and out of bed, dressing, bathing, using the toilet, shopping, eating, and taking medications.
- More than 100 days of skilled nursing facility care during a benefit period after a hospital stay. The Medicare Part A benefit period begins the first day you receive a Medicare-covered service and ends when you’re out of a hospital or a skilled nursing facility for more than 60 days in a row.
- Services for help with household chores.
- Private nursing care.
- Most dental care and dentures.
- Medical care is received while traveling outside the United States, except under limited circumstances.
- Cosmetic surgery and routine foot care.
- Routine eye care, eyeglasses (except after cataract surgery), and hearing aids.
What you will have to pay under Original Medicare
For Medicare Parts A and B, you will generally have to pay monthly insurance premiums, as well as deductibles, copays, and coinsurance. You also pay the full cost of services that Medicare doesn’t cover.
- Insurance premiums are the amounts you must pay to keep your Medicare coverage. Most people don’t have to pay an insurance premium for Part A, but everyone does have to pay an insurance premium for Part B. Insurance premium amounts can change each year in January.
- A deductible is an amount you must pay for covered medical expenses before Medicare begins to pay for them.
- A copay is a set dollar amount that you usually have to pay each time you see a doctor or go to the hospital.
- Coinsurance is the percentage of the cost of a service that you pay after Medicare pays its share of the cost. This means that if Medicare pays 80 percent of the cost of a service, you will pay the remaining 20 percent.
Ask if your doctor “accepts assignment”
An assignment is an agreement between doctors and other health care providers and Medicare. Doctors who “accept assignment” charge only the amount that Medicare will pay them for a service. You must pay any deductible, coinsurance, or copayment that you owe.
Physicians who do not accept assignments may pay more than the Medicare-approved amount. You are responsible for excess charges. Also, you may have to pay the full cost of the service when you receive it, and then wait for Medicare to reimburse you.
Use your Medicare Summary Notice to review charges. You will receive a Medicare Summary Notice each quarter. If you were overcharged or not reimbursed, follow the instructions in the notice for reporting the overcharge to Medicare. The notice will also tell you if there is a deadline for filing a complaint or appealing the charges and services that were denied. If you have Original Medicare, you can also view your Medicare claims online at MyMedicare.gov.
Medicare has a directory of doctors, hospitals, and providers that work with Medicare. The Physician Compare directory also shows you which providers have accepted the assignment on Medicare claims.
Medicare Advantage Plans
You may have the option to join a Medicare Advantage plan, also called Medicare Part C. To be eligible, you must have Medicare Part A and Part B and live in the area that has a plan.
The Federal government contracts with insurance companies and managed care plans to offer Medicare Advantage plans in certain geographic areas. Medicare pays the plan a set monthly amount for the plan to provide Medicare Parts A and B services to its members. You pay your monthly Medicare Part B insurance premium and any insurance premium charged by the Medicare Advantage plan. You will also have to pay any copays, deductibles, and coinsurance that the plan requires.
If you are in a Medicare Advantage plan, you will not receive a Medicare Summary Notice. Instead, you will receive monthly statements from your plan and you may be able to view your claims on the plan’s website.
Medicare Advantage options vary by zip code and county. Options available in Texas include:
- Managed-care plans, such as Health Maintenance Organizations (HMOs), Preferred Provider Organizations (PPOs) ) and Provider-Sponsored Organizations (PSOs);
- private fee-for-service plans; Y
- Medicare special needs plans.
Medicare Advantage plans generally have more benefits than original Medicare. For example, some Medicare Advantage plans cover dental and vision services. However, Medicare Advantage may not be the best option for some people. Your choice of doctors and hospitals in a Medicare Advantage plan is limited. If you have other insurance, such as a group retirement plan, ask your group plan if it works with a Medicare Advantage plan or Original Medicare.
Because Medicare contracts with Medicare Advantage plans each year, the plans available and the benefits they offer may change each year. If your plan stops any services, you will have to find another plan in your area or return to the original Medicare. To find out what plans are available in your area, call Medicare or visit the Medicare Plan Finder.
If your Medicare Advantage plan leaves your area, or you move out of the plan’s service area, you may have the right to join a different Medicare Advantage plan. You may also be entitled to purchase Medicare Supplement Plans A, B, C, F (including Plan F with a high deductible), K, or L, regardless of your medical history or condition.
If your Medicare Advantage plan ends, it must notify you in writing of your options and tell you how long you have to purchase a Medicare supplement policy. The written notice is proof to the Medicare supplement company that you are entitled to purchase Medicare supplement insurance. If you are under age 65 and have Medicare, this right in Texas is limited to Medicare Supplement Insurance Plan A.
The open enrollment period for Medicare Advantage and prescription drug plans is from October 15 to December 7.
Medicare will mail you the Medicare & You handbook each year before open enrollment. The handbook contains a list of Medicare Advantage plans and prescription drugs. Use the handbook to review your Medicare Advantage plan or prescription drug plan for any changes and costs.
The Texas State Health Insurance Assistance Program (SHIP) can help you compare plans and costs in your area. Call SHIP at 800-252-9240.
The Medicare Open Enrollment Period does not apply to Medicare Supplement plans.
Medicare Supplement Insurance
Medicare supplement insurance covers the coverage gap between what original Medicare pays and what you must pay out of pocket for deductibles, coinsurance, and copays.
Medicare supplement policies only pay for services that Medicare deems medically necessary, and payments are generally based on the Medicare-approved amount. Some plans offer benefits that Medicare doesn’t, like emergency care outside the United States.
Medicare supplement policies are sold by private insurance companies that are licensed and regulated by TDI. However, the federal government sets Medicare supplemental benefits.
It’s best to purchase Medicare supplement insurance during your six-month open enrollment period. Your open enrollment period begins when you enroll in Medicare Part B at age 65 or older. During that time, companies cannot refuse to sell you a policy because of your health history or condition. If you wait until after the open enrollment period, you may not be able to buy a policy if you have a pre-existing condition.
Note: Your Medicare Supplement policy automatically renews each year to ensure you have continued coverage. If you cancel your Medicare supplement policy, you may not be able to get it back, or you may not be able to buy a new policy.
Medicare Select is a type of Medicare supplement policy that generally requires you to use doctors and hospitals in the plan’s network for your routine care. If you use an out-of-network hospital, except in an emergency, you will have to pay more toward the cost.
If you move out of the plan’s service area, you have the right to buy a Medicare supplement policy that offers the same or fewer benefits than your current policy. You must buy the plan from the same company that provides your Medicare Select coverage. If you’ve had your Medicare Select policy for more than six months, you won’t have to answer any medical questions.
The 10 Standardized Medicare Supplement Insurance Plans
There are 10 Medicare supplement insurance plans. Each plan is marked with a letter of the alphabet and offers a different combination of benefits. Plan F has a high deductible option. Plans K, L, M, and N have different cost-sharing components.
Each company must offer Plan A. If they offer other plans, they must offer either Plan C or Plan F.
The 10 Medicare supplement plans (Plans A, B, C, D, F, G, K, L, M, and N) provide the following benefits:
- Pays your daily copays for inpatient hospital expenses from days 61 through 90 of the Medicare benefit period.
- Pays Medicare Part A copays for any hospital stay after the 90th day in a benefit period, up to an additional 60 days during your lifetime. (Those are your inpatient reserve days. You can use these days when you need to stay in the hospital for more than 90 days during a benefit period. When you use a reserve day, that day is counted against your total available lifetime and you will not be able to use it again).
- Pays Medicare Part A coinsurance plus coverage for an additional 365 days after Medicare benefits end.
- Pays coinsurance for skilled nursing facility care.
- Hospice: Pays copay for outpatient pain medications and coinsurance for inpatient long-term respite care. Plans K and L pay this cost at a different price. You must comply with Medicare requirements, including obtaining a doctor’s certification that you are terminally ill.
- Medical expenses: After you’ve met the Part B deductible, you pay your 20 percent Part B coinsurance portion of doctors’ bills, hospital or home care, and certain other expenses Medicare eligible. Plans K, L, and N require you to pay a 20 percent Part B coinsurance portion.
- Blood: Pays for the first three pints of blood each year under Medicare Parts A and B.
- Plans B, C, D, F, G, and N pay the full amount of the Part A deductible. Plans K, L, and M pay a percentage of the Part A deductible. The limits on the money you pay out of your own pocket apply to Plans K and L.
- Plan N requires a $20 copay for most office visits and $50 for emergency room care.
- Plans C and F pay the Part B deductible.
- Plans C, D, F, G, M, and N pay copays from the 21st through the 100th day in a benefit period for skilled nursing facility care after death. hospitalization eligible under Medicare Part A. This is not attendant care. Plans K and L pay a portion of the cost until you meet the annual out-of-pocket limits. Then the plan will pay 100 percent.
- Plans C, D, F, G, M, and N pay for emergency care while traveling outside of the United States. They pay 80 percent of the charges that Medicare would have paid if you had been in the United States. Care must begin during the first 60 days that you are outside the United States. The deductible for the calendar year is $250. The maximum lifetime benefit is $50,000.
- Plans F and G pay for medical charges beyond Part B that Medicare doesn’t cover. They pay 100 percent of excess charges, which is capped at 15 percent over the Medicare-approved amount.
This table summarizes the benefits offered by each plan: Standard Medicare Supplement Insurance Plans.
How to keep your coverage if you move
If you move to another county or state, make sure your Medicare plan will continue after you move.
If you have Original Medicare, federal regulations generally allow you to keep your Medicare supplement policy. There are some exceptions if you have a Medicare Select plan or if you have a plan that includes added benefits, such as vision coverage or discounts that were only available where you bought the plan.
If you have a Medicare Advantage plan, ask if the plan is available in your new zip code. If the plan is not available, you will have to get a new one. You can switch to another Medicare Advantage plan in your new area or to Original Medicare.