Page 116 - issue
P. 116
that requires immediate medical care. plan that was introduced in 2010. Like Applying for a Medigap Policy
Services must qualify for Medicare Plan G, it has been growing in popular- Beginning in the month that you turn
Parts A or B had they been rendered in ity. It does not cover the Part B 65 and also enroll in Medicare Part B,
the United States. After you pay a $250 Deductible and includes a co-pay for you are entitled to a one-time Medicare
deductible, the Foreign Travel doctors’ office and emergency room vis- Supplement Open Enrollment period.
Emergency benefit will pay for 80% of its. If you are used to paying a fixed For six months, companies must sell
your eligible charges, up to $50,000 amount each time you visit the doctor you any Medigap plan that they offer
over your lifetime. this plan may be a good fit for you. without asking health questions for you
to qualify. Some companies will allow
Popular Medigap Plans Policyholder Value you to apply a few months before you
The three most popular plans are Plan As of year-end 2015, there were 11.9 turn 65.
F, Plan G and Plan N. million Medigap policyholders nation-
wide. Companies paid close to 80% of There are other limited opportuni-
Plan F: This is the most popular premium dollars for policyholder ties to purchase a policy without
plan, and accounts for more than 50% claims2. Remaining premium dollars answering health questions, known as
of all Medigap policies. It offers the were used to pay for the companies’ Guaranteed Issue situations. In these
most comprehensive coverage but is cost of policy administration, distribu- circumstances, you are entitled to a 63-
also the most expensive. tion expenses, state premium taxes, day period during which you may buy
and company profit (usually under certain Medigap plans. The more com-
Plan G: Plan G is growing in popu- 5%). mon of these relate to losing prior
larity, increasing by 17% from 2013 to employer or Medicare Advantage cover-
20141. It covers all the benefits in Plan An AHIP survey in March 2014 age, moving out of a service area, or
F with the exception of the Part B showed that policyholders highly value coming back from a short Medicare
Deductible ($166 in 2016). The price their coverage: 94% of respondents are Advantage trial period. There are a few
difference between Plan F and Plan G satisfied with their coverage, and 91% states with additional Open Enrollment
is often more than twice the amount would recommend it to a relative or entitlements.
of the deductible. If you can afford to friend. What respondents like the most
pay the $166 deductible charges on about Medigap coverage: Outside of Open Enrollment and
your own you will likely save much ◆ Limits on out-of-pocket costs Guaranteed Issue periods, you will gen-
more than $166 in premium pay- ◆ Ease of dealing with bills and paper- erally need to answer medical history
ments. Plan G has recently experi- work questions to buy a Medigap policy
enced lower trend rate increases and ◆ Ability to budget for unexpected (known as underwriting). Requirements
can be a very good value over the long medical costs will vary from company to company,
term. ◆ Can choose to visit any doctor and it is possible that if you do not
qualify for a policy with one company
Plan N: Plan N is a relatively newer you may with another.
Paying for Your Medigap Policy
In most states including Maryland,
Medigap policies have attained age rate
schedules. With an attained age rate
structure, premiums begin at their low-
est level at age 65 and then increase by
a few percent every year that you get
older. This type of rate is cheapest for
you when you enter Medicare, but you
need to budget for an increase in rates
as you age. Some states, including
Florida, require premiums to be based
on your age at the time you bought the
policy and not increase as you age.
Others, including New York, use com-
munity rating, where everyone pays the
same rate regardless of age. These
1AHIP analysis of NAIC data
2 Mark Farrah Associates, based on
2015 NAIC data
112 u www.wherewhatwhen.com u
Services must qualify for Medicare Plan G, it has been growing in popular- Beginning in the month that you turn
Parts A or B had they been rendered in ity. It does not cover the Part B 65 and also enroll in Medicare Part B,
the United States. After you pay a $250 Deductible and includes a co-pay for you are entitled to a one-time Medicare
deductible, the Foreign Travel doctors’ office and emergency room vis- Supplement Open Enrollment period.
Emergency benefit will pay for 80% of its. If you are used to paying a fixed For six months, companies must sell
your eligible charges, up to $50,000 amount each time you visit the doctor you any Medigap plan that they offer
over your lifetime. this plan may be a good fit for you. without asking health questions for you
to qualify. Some companies will allow
Popular Medigap Plans Policyholder Value you to apply a few months before you
The three most popular plans are Plan As of year-end 2015, there were 11.9 turn 65.
F, Plan G and Plan N. million Medigap policyholders nation-
wide. Companies paid close to 80% of There are other limited opportuni-
Plan F: This is the most popular premium dollars for policyholder ties to purchase a policy without
plan, and accounts for more than 50% claims2. Remaining premium dollars answering health questions, known as
of all Medigap policies. It offers the were used to pay for the companies’ Guaranteed Issue situations. In these
most comprehensive coverage but is cost of policy administration, distribu- circumstances, you are entitled to a 63-
also the most expensive. tion expenses, state premium taxes, day period during which you may buy
and company profit (usually under certain Medigap plans. The more com-
Plan G: Plan G is growing in popu- 5%). mon of these relate to losing prior
larity, increasing by 17% from 2013 to employer or Medicare Advantage cover-
20141. It covers all the benefits in Plan An AHIP survey in March 2014 age, moving out of a service area, or
F with the exception of the Part B showed that policyholders highly value coming back from a short Medicare
Deductible ($166 in 2016). The price their coverage: 94% of respondents are Advantage trial period. There are a few
difference between Plan F and Plan G satisfied with their coverage, and 91% states with additional Open Enrollment
is often more than twice the amount would recommend it to a relative or entitlements.
of the deductible. If you can afford to friend. What respondents like the most
pay the $166 deductible charges on about Medigap coverage: Outside of Open Enrollment and
your own you will likely save much ◆ Limits on out-of-pocket costs Guaranteed Issue periods, you will gen-
more than $166 in premium pay- ◆ Ease of dealing with bills and paper- erally need to answer medical history
ments. Plan G has recently experi- work questions to buy a Medigap policy
enced lower trend rate increases and ◆ Ability to budget for unexpected (known as underwriting). Requirements
can be a very good value over the long medical costs will vary from company to company,
term. ◆ Can choose to visit any doctor and it is possible that if you do not
qualify for a policy with one company
Plan N: Plan N is a relatively newer you may with another.
Paying for Your Medigap Policy
In most states including Maryland,
Medigap policies have attained age rate
schedules. With an attained age rate
structure, premiums begin at their low-
est level at age 65 and then increase by
a few percent every year that you get
older. This type of rate is cheapest for
you when you enter Medicare, but you
need to budget for an increase in rates
as you age. Some states, including
Florida, require premiums to be based
on your age at the time you bought the
policy and not increase as you age.
Others, including New York, use com-
munity rating, where everyone pays the
same rate regardless of age. These
1AHIP analysis of NAIC data
2 Mark Farrah Associates, based on
2015 NAIC data
112 u www.wherewhatwhen.com u
