How do I pay for my Medicare Supplement policy?
Medicare Supplement insurance plans are offered by private insurance companies and may help you pay for out-of-pocket costs for services covered under Original Medicare (Part A and Part B).
Both your Medicare Part B and Medicare Supplement plan usually require a monthly premium payment, but Medicare Part A usually does not. Most people get premium-free Medicare Part A by paying Medicare taxes while working for at least 10 years. (If you have to pay for Part A, you’ll pay up to $413 each month in 2017.)
The Medicare Part B premium is between $109 and $134 for most people in 2017 (you can read more about the Part B premium here).
Paying for your Medicare Supplement plan
Medicare Supplement plans also charge a monthly premium. The amount can vary widely depending on several factors, including which plan you choose and what extent of coverage it offers, which age-related pricing method the plan uses, and whether you were subjected to medical underwriting or not. Since Medicare Part B premiums are paid to the government and Medicare Supplement premiums are paid to the private insurer, the payments cannot be made together. You can’t pay your Medicare Supplement premium through Medicare Easy Pay. Your private health insurer will let you know your payment options for your particular Medicare Supplement plan costs.
Some plans may offer discounts depending on how you pay — for example, if you pay up front once a year, or if you pay using electronic funds transfer. With an electronic funds transfer, you can set up a monthly payment to debit automatically from a checking account or credit/debit card. Different plans may have different payment options.
Several factors can influence your Medicare Supplement plan costs.
- The first factor is what your plan covers. All 10 Medicare Supplement policies available in most states (A, B, C, D, F, G, K, L, M, and N) offer at least some of the following benefits: Medicare Part A hospital cost coinsurance, Medicare Part B coinsurance, first three pints of blood, Part A hospice care coinsurance or copayment, skilled nursing facility care coinsurance, Part A deductible, Part B deductible, Part B excess charges and limited coverage of foreign travel emergencies. Different plans may cover the same thing–for example, skilled nursing facility care coinsurance–but one plan may cover it at 50% and one may cover it at 100%.
- The next factor influencing your Medicare Supplement plan cost is the pricing system used. There are three ways that Medicare Supplement plans may be priced or “rated.“ The first way does not consider age or gender in the price or the plan. This is called community rated or “no-age-rated.“ The second way bases the premium on the age you are when you buy the Medicare Supplement policy. This is called issue-age rated or “entry age-rated.“ The third way continues to increase premiums as you get older. This is called attained-age-rated. With all three ways, premiums may go up because of inflation and other factors.
- A third factor influencing your Medicare Supplement plan cost is whether or not you were subjected to medical underwriting. Medical underwriting involves evaluating your health condition, so people with health problems might be charged more for their health-care plans than people who are healthy – or might be denied coverage altogether.
To avoid medical underwriting, you may want to buy a Medicare Supplement policy during your Medicare Supplement Open Enrollment Period, when you have a guaranteed-issue right to acceptance in the plan. The Open Enrollment period is a 6-month window after you’re both 65 or older and enrolled in Medicare Part B. Some states have additional Open Enrollment periods including those for people under age 65.
You also might have guaranteed-issue rights to acceptance in a Medicare Supplement plan when your health coverage changes in some way, such as your Medicare Supplement insurance company goes bankrupt or before the end of a year-long “trial right” to a Medicare Advantage plan.
Once you’ve decided on a Medicare Supplement plan, be sure to pay the premiums on time, as the plan can drop you for non-payment.
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