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Medicare Supplement Policies and How They Work

There are many insurance companies out there that sell Medigap/Medicare Supplement policies. It is a private health insurance that is designed to supplement Original Medicare. What that means is it helps pay some of the health care costs or (“gaps”) that Medicare does not cover, (such as co-payments, coinsurance and deductibles). There are ten standard Medicare Supplement policies with the letters A through J and two plans that contain a high calendar year deductible. You may choose which plan best suits you.

Medicare Supplement Eligibility

You are eligible to buy a Medigap/Medicare Supplement policy during your Medigap/Medicare open enrollment period. This period lasts for 6 months and begins on the first day of the month in which you are 65 or older and enrolled in Medicare Part B. Some states have additional open enrollment periods.

When you are under age 65 and have received Social Security disability benefits for 24 months, you are eligible. Some, but not all insurance companies sell Medigap/Medicare Supplement plans to people under age 65. When you reach age 65, you will receive a 6 month open enrollment period and may purchase any Medigap/Medicare Supplement policy that is available in your state.

There are some states that allow you, if you are eligible for Medicare by reason of disability an open enrollment period when you first enroll in Medicare Part B.

What Medigap/Medicare Policies Do Not Cover

Medigap Policies do not cover long-term care (such as nursing home), vision, dental care, hearing aids, eyeglasses, and private duty nursing.

What determines the Cost of Supplemental Policies

Medigap/Medicare Supplement policies can be priced or “rated” in three ways:

1. Community-rated (also called “no-age-rated”)
2. Issue-age-rated
3. Attained-age-rated

Every insurance company decides how it will set its price, or premium, for its supplemental policies. It is important to ask how an insurance company prices its policies. The way they set the price affects how much you pay now and in thee future.

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