What Percentage of Retired Seniors Buy Medicare Supplement Insurance?

What is Medicare Supplement Insurance?

As you start to reach retirement age, you might be thinking – should I purchase Medicare Supplement insurance?

Medicare Supplement insurance works alongside your Original Medicare to help cover some of the costs, which you might otherwise be required to pay out of pocket. Some of the health care costs it helps pay that Original Medicare doesn't cover include copayments, coinsurance, and deductibles.³ To figure out your specific coverage, you should refer to Medicare deductibles and other cost-sharing amounts on Medicare.gov.

Benefits of Medicare Supplement Insurance

There are numerous benefits to having Medicare Supplement insurance.³ Depending on the Medicare Supplement plan chosen, benefits can include, but are not limited to:

• Emergency overseas health coverage
• Paying for Medicare Part B excess charges
• Other cost-sharing

Since this type of insurance can be beneficial in the event your Original Medicare insurance plan doesn't cover certain costs, more than 25 percent of retired seniors without employee retiree coverage buy it.¹

Medicare Supplement Eligibility and Options

If you're currently enrolled in Original Medicare Part A and B, you're typically automatically eligible to apply for a Medicare Supplement insurance policy.

It's important to realize there may be restrictions when it comes to enrolling in a Medicare Supplement policy, though. For instance, if you're under age 65 and have Original Medicare, you may not be able to enroll in Medicare Supplement.³ Federal law does not provide for Medicare supplement coverage for Medicare beneficiaries under age 65.³ However, some states require insurance companies to offer certain Medicare Supplement policies to applicants under age 65 on Medicare due to disability or End Stage Renal Disease. Medicare Supplement insurance generally doesn't cover long-term care, vision or dental care, hearing aids, eyeglasses, or private-duty nursing.³

Eligibility ultimately depends on your state, so check with your state's insurance department for specific guidelines.

Medicare Supplement Open Enrollment Period

If you're eligible for a Medicare Supplement policy, your next step would be to figure out when your Open Enrollment period takes place.

Typically, there is a six-month period for Open Enrollment. Once you turn 65, it starts on the first day of the month that you are enrolled in Medicare Part B.⁴

Timing is important when it comes to enrolling in a Medicare Supplement Insurance policy. The time period in which you sign up for coverage can significantly affect availability. Timing can impact costs and whether companies can deny you coverage all together based on pre-existing conditions.⁴ Enrolling during your Medicare Supplement Open Enrollment period gives you the best plan choices. Different states may have special enrollment periods, so make sure to check your state's guidelines for specific information on when all your enrollment opportunities are.

If You Miss Open Enrollment

If you miss your Open Enrollment period, it's still possible to find coverage. However, it can become more difficult. Outside of the standard six-month Open Enrollment period, a Medicare Supplement policy could come at a higher premium, be subject to underwriting, or coverage might not be offered at all.⁴

Depending on certain situations, there is still a possibility of enrolling with Guaranteed Issue rights, depending on certain situations. These situations may include, but are not limited to:

• Involuntary loss of certain insurance coverage, such as employer coverage or Medicare Advantage
• Your insurance company going bankrupt or misleading you
• Moving out of your Medicare Advantage plan service area¹

With guaranteed issue rights, you may have the ability to enroll in certain Medicare Supplement plans offered in your state. Again, eligibility for a Guaranteed Issue Medicare Supplement policy ultimately depends on your state, so check with your state's insurance department of consumer affairs for specific guidelines.

In the event you've completely missed or are denied coverage, know you have other options.

Sources:
¹ Kff.org, Medigap Enrollment and Consumer Protections Vary Across State, 2018
² Medicare.gov, Guaranteed Issue Rights, 2019
³ Medicare.gov, What's Medicare Supplement Insurance (Medigap)?, 2019
⁴ Medicare.gov, When Can I Buy Medigap?, 2019