How Do I Pay for My Medicare Supplement Insurance Plan?
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 insurance 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 $437 each month in 2019.)
The standard Medicare Part B premium is $135.50 in 2019 (you can read more about the Part B premium here).
Paying for your Medicare Supplement insurance plan
Medicare Supplement insurance 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 insurance premiums are paid to the private insurer, the payments cannot be made together. You can’t pay your Medicare Supplement insurance premium through Medicare Easy Pay. Your private health insurer will let you know your payment options for your particular Medicare Supplement insurance 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 insurance plan costs.
- The first factor is what your plan covers. All Medicare Supplement insurance 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, and hospice care coinsurance or copayment. Some Medicare Supplement plans may cover at least some of these Medicare-approved expenses: skilled nursing facility care coinsurance, Part A deductible, Part B deductible*, and Part B excess charges. Some plans offer limited coverage of foreign travel emergencies. Different plans may cover the same expense–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 insurance plan cost is the pricing system used. There are three ways that Medicare Supplement insurance 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 insurance plan. 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 insurance 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.
*You won’t be able to buy Medicare Supplement plans that cover the Medicare Part B deductible – Plan C and Plan F – if you’re new to Medicare. If you become eligible for Medicare on January 1, 2020 or later, you won’t be able to buy Medicare Supplement Plan C or Plan F. You’ll be able to keep your Plan C or Plan F if you already have one. Also, you might be able to buy Plan C or Plan F if you qualify for Medicare before January 1, 2020.
You might be able to buy a high-deductible version of Medicare Supplement Plan G, which is very similar to Plan F, in 2020. The only difference between Plan F and Plan G is that Plan G doesn’t cover the Medicare Part B deductible.
To avoid medical underwriting, you may want to buy a Medicare Supplement insurance plans 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 insurance 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 insurance plan, be sure to pay the premiums on time, as the plan can drop you for non-payment.
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