Supplements are often referred to as Medigaps. Some will use the term “secondary”. So as there is no confusion, they are referring to the same type of plan and may be used interchangeably. These plans are not health plans but rather insurance contracts. As such, supplements are primarily regulated by the insurance commissioner of your state.
Medicare has designated supplements as Part E. Beneficiaries should know that they may NOT have both a Medicare Advantage plan AND a supplement. They must choose one or the other. Additionally, supplements are not permitted to include a prescription drug plan. With a supplement, a Part D Prescription drug Plan must be purchased separately.
The benefits covered by supplements are set by individual states. Most every state adheres to a standardized menu of benefits. Each available plan is lettered–Plan A to Plan N. Insurance companies that choose to offer supplements must conform to the rules and structure required by that state. As such, each plan–Plan A to Plan N, is the same offered by every other insurance company. It’s worth noting that insurance companies are not required to offer every plan type. For example, some insurers may choose not to offer Plan K, Plan L or any other particular plan. Insurers do compete on price, underwriting guidelines, customer service and so on. Some plans may offer some extras, such as membership to a health club, to enhance their plans.
When first eligible for Medicare Part A and Part B, there is a 6 month period to choose a supplement with no questions asked. This is the Open Enrollment Period during which plans are issued on a guaranteed basis. After this time, beneficiaries may enroll in a supplement at any time throughout the year. However, they are subject to an underwriting process in which insurers may ask about an applicant’s health status. Coverage may be denied.
There are circumstances which generate a guaranteed issue right–for example, if a Medicare Advantage plan ends or a beneficiary is disenrolled from their Medicare Advantage plan because they moved out of the area, then the supplement will be issued on a guaranteed basis without underwriting.
Once enrolled in a supplement, it is guaranteed renewable for life as long as premiums are maintained.