Frequently Asked Questions

What is Medicare?

Medicare is health insurance for American citizens over the age of 65 or under the age of 65 who meet certain conditions. It was established in 1965 through the Social Security Act of 1965. At a basic level it provides payment for hospital stays (Part A), medical insurance (Part B), an alternative private insurance program called Medicare Advantage (Part C), and coverage for prescription drugs (Part D).

Will Medicare cover all my medical expenses?

No, Medicare will not cover all your medical expenses. There are a number of deductibles, co–payments, and other cost sharing measures. These can lead to significant out of pocket expenses. For example, Medicare part B requires you to pay 20% coinsurance after the deductible. As you can imagine, if a very expensive procedures is performed, paying 20% of the cost can be significant. To learn more about specific costs you are responsible for, visit our statistics section.

What is a Medicare Supplement policy?

Medicare Supplement insurance helps to pay much (or all) of the out of pocket costs Medicare participants are responsible for. Medicare Supplement insurance is also called Medigap and MedSup. Medigap plans come in multiple flavors, each described by a letter A through N (although E, H, I, and J are no longer available for new policies). Fortunately, these plans are standardized in most states so a Plan A is always the same, as is a Plan F, and so forth. A grid of these benefits, taken from the Guide to Choosing a Medigap Policy is below.

Do any of the plans cover all of my out–of–pocket costs for Medicare approved expenses?

Yes, the Plan F is a very popular option for this exact reason. Many seniors like that fact that if Medicare approves the charge, Plan F will pay for whatever Medicare does not. This helps retirees plan for their medical expenditures and reduces uncertainty.

What is a 'Guaranteed Issue' period?

Guarantee Issue periods are times when no insurer can decline your application for a Medigap policy. For seniors with past health issues, this may be the only time you can be approved for a supplemental plan. The most common guaranteed issue period is during your open enrollment – this starts the first month you are covered by Medicare Part B AND you are older than 65. You may also in a guaranteed issue period when you leave employer coverage or Medicare Advantage. Medicare provides more comprehensive information in their Guide to Choosing a Medigap Policy.

What are the different types of pricing used for Medigap policies?

Understanding how a policy is priced is important for anticipating your future premium costs.

  • Attained Age – Your premium is based on your current age and will go up as you age. The insurer will provide a schedule of what premiums will be at future age levels. However, these schedules can be adjusted upward because of inflation and other factors.
  • Issue Age or Entry Age – Your premiums is based on when you enrolled and will not rise simply because you age.
  • Community Rates – Your premium is the same as everyone else with the policy regardless of age.

As you can see, it is important to understand how your insurer's rates are done so you are not surprised by changes in the future.

What is Medicare assignment?

Doctors and medical practices that accept Medicare assignment agree that the Medicare approved amounts for certain services is considered payment in full. If a provider does not accept assignment, they are allowed to charge up to the 'limiting charge' over and above the Medicare approved amount. Right now the limiting charge is 15%. Therefore, for a $1,000 procedure, the provider could charge $1,150. Medicare would pay $800 (80% of $1,000) and you would be left to pay the remaining 20% plus the limiting charge for a total of $350 ($200 coinsurance plus $150 excess charge). If you have a medigap policy it would pay the coinsurance portion of $200. With a Plan F or G, it would cover the excess charge of $150 as well leaving you with nothing to pay out of pocket.

Have Questions?

If at any point you would like to speak with someone for more information,
contact 1-800-258-7041 or fill out our Request Information form!