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Medicare Supplement
Because Medicare won't cover all your health-care costs during retirement,
you may want to consider purchasing a supplemental medical insurance
policy. Medicare Supplement policies are specifically designed to fill
some of the gaps in your Medicare coverage.
Where can you buy a Medicare Supplement policy?
Medicare Supplement policies are sold right her at The Falls Insurance
Center. However, they are standardized and regulated by federal and state
law.
When's the best time to buy a Medicare Supplement policy?
The best time to buy a Medicare Supplement policy is during your open
enrollment period, since you can't be turned down or charged more because
you are in poor health. If you are age 65 or older, your open enrollment
period starts when you first enroll in Medicare Part B. Or, if you are not
yet 65, your open enrollment period starts when you turn 65, and then
lasts for six months. A few states also require that a limited open
enrollment period be offered to Medicare beneficiaries under age 65.
If you don't buy a Medicare Supplement policy during your open enrollment period, you may not be able to buy the policy you want later. You may find yourself having to settle for whatever type of policy an insurance company is willing to sell you.
Note: If you are currently age 62 or younger (i.e., you were born in 1938 or later), you should be aware that your eligibility for Medicare may be affected by the increase in the normal retirement age for Social Security. Starting in 2000, the age for collecting full Social Security benefits will gradually increase from age 65 to age 67 over a 22-year period. This means that the age at which you can begin receiving Medicare benefits may be greater than 65 (if current law still applies) because the date you become eligible for Medicare is the date you reach normal retirement age. However, neither the Social Security Administration nor the Health Care Financing Administration has yet published information on how the change in normal retirement age will affect Medicare eligibility.
What does a Medicare Supplement policy cover?
Under federal law, only ten standardized plans can be offered as Medicare
Supplement plans. All ten must cover certain services, no matter in which
state you live. Medicare Supplement policies pay most, if not all,
Medicare coinsurance amounts. Some also provide coverage for deductibles
and services that are not covered by Medicare such as prescription drugs
and preventive care.
Each Medicare Supplement policy is labeled with the letter "A" through "J". You can buy the Medicare Supplement plan that best suits your needs. Plan "A" is the basic benefit plan, while Plan "J" offers the most coverage. However, it is important to note that not all ten plans are available in every state.
How do I compare Medicare Supplement policies?
You don't have to compare the policy offered by one insurance company to
the policy offered by another insurance company. Because Medicare
Supplement policies are standardized, there are no variations. Plan "B"
purchased through an insurance company in New York will offer the same
coverage as Plan "B" purchased through an insurance company in Minnesota.
All you have to do is decide which plan you want to buy.
However, even though the plans offered by insurance companies are identical, no two insurance companies are alike. So, look closely at the company's reputation and customer service standards. And check out what you'll pay for Medicare Supplement coverage--Medicare Supplement premiums vary widely, both from company to company and from state to state.
Does everyone need Medicare Supplement?
No. In fact, it's illegal for an insurance company to sell you a Medicare
Supplement policy that substantially duplicates any existing coverage you
have, including Medicare coverage.
You may not need to buy a Medicare Supplement policy if you work past age 65 and have employer-sponsored health insurance. You can still enroll in Medicare, but your employer-sponsored insurance will be your primary payer, so you'll submit claims to them first. Medicare will be the secondary payer, paying costs covered by Medicare, but not covered by your employer's plan. If you find yourself in this situation, you may want to enroll in Medicare Part A (since it's free). However, remember that if you enroll in Medicare Part B, your open enrollment period for Medicare Supplement starts. If you won't be buying a Medicare Supplement policy within six months, you may be denied coverage later or charged a higher premium.
In addition, you may not need to buy a Medicare Supplement policy if you are covered by an employer-sponsored health plan after you retire. In this case, your employer plan will be your primary payer, and Medicare will be your secondary payer. However, if you wish, you can convert your employer-provided plan into a Medicare Supplement policy. In fact, some insurance policies automatically change coverage when you reach age 65 because they assume you will sign up for Medicare.