The Advantages and Disadvantages of Medicare Supplement Insurance Plans
For the purposes of this description, when we say “Medicare Supplement Insurance Plans,” we are referring to standardized Medicare Supplement Insurance Plans C, D, F, and G available in most states. Every standardized Medicare Supplement Insurance Plans is the same in terms of benefits regardless of which insurance company you are looking at, so what we say here applies to every company.
First and most importantly, every supplement works with any doctor or hospital who accepts Medicare. A person who chooses a Medicare Supplement Insurance Plans does not have to worry whether a doctor is in a network. If the service being provided is Medicare approved and the doctor is a Medicare provider, the insurance will work. It works all around the country too, making Medicare Supplement Insurance Plans an ideal choice for people who frequently travel or who have doctors in multiple states.
Most benefits in a Medicare Supplement Insurance Plans are paid by a percentage, not a dollar amount. For example, the true benefit of the Medicare Part A deductible is typically 100%, regardless what the actual dollar amount is the year you need to pay it. And most benefits are either 100% or 0% depending which plan you choose. So as Medicare raises its costs to you each year, your benefits will remain the same. A benefit you get fully paid the year you purchase your Medicare Supplement Insurance Plans will typically remain fully paid 20 years later. Benefit stability does NOT mean premium stability! Like most health insurance, expect your premium to go up on an annual basis.
Medicare Supplement Insurance Plans are considered “guaranteed renewable” and they cannot be taken away from you for any reason except your refusal to pay the premium. If you leave the area, your supplement will go with you to your new place of residence. If you suddenly get sick and have many major medical bills, the insurance will not be dropped because of changes in your health.
First and most importantly, Medicare Supplement Insurance Plans are not allowed to cover Part D, the prescription drug plan. Part D is a separate purchase and has a separate policy attached to it. A person with a Medicare Supplement Insurance Plans therefore needs to keep track of 3 different cards: their Medicare card, a Medicare Supplement Insurance Plans card, and a prescription drug card. Also, it is both unnecessary and highly recommended you do not simply purchase a drug plan from the same insurance carrier you purchase your supplement from.
Medicare Supplement Insurance Plans, like most health insurance, have premiums that rise over time. While there are different ways a supplement premium is calculated, no company is going to give you the guarantee of a fixed insurance premium for life. Price increases can happen at any time, multiple times a year, and in different percentage amounts. And a company’s price increase amount and the time they choose to increase it can change at any time. Their history has little bearing on how they will treat their premiums in the future.
Limitations, copayments, and restrictions may apply.
Benefits, formulary, pharmacy network, provider network, premium and/or co-payments/co-insurance may change on January 1 of each year.