Health insurance is a highly controversial topic these days, as many Americans find themselves with no coverage, insufficient coverage or over burdened by the prohibitive cost of most health insurance policies. The Medicare system was established in 1965 to help defray these costs for senior citizens, most of who are on a limited budget. Medicare, however, does not cover all health related expenses; it typically covers 80% of covered services, leaving Medicare recipients with potentially large bills as well as the copays and deductibles that are standard in all health insurance policies. To help defray these costs, Medicare supplements were created, and they are now available to seniors nationwide, including those based in South Dakota.
The Differences Between Medicare Advantage and Medigap in South Dakota
The two most popular forms of Medicare supplements in South Dakota are Medigap and Medicare Advantage. Also known as Medicare Part C, Medicare Advantage is a policy provided by a private insurance company that covers many of the expenses not covered by Medicare Parts A and B, as well as some other services depending on the plan, such as prescription drug coverage, vision screenings and hearing tests. Medicare Advantage is available in PPO, HMO and FFS versions. Most Medicare Advantage plans require that policy holders use Medicare-approved service providers though some provide limited coverage for out of network physicians. Like all private health insurance policies, Medicare Advantage plans differ in coverage from provider to provider, which means that all South Dakota seniors interested in a Medicare Advantage plan should do their homework carefully.
Medigap, on the other hand, is a federally-regulated Medicare supplement that is available in ten different forms, one of which should be chosen based upon the senior’s specific needs and budget. Insurance companies are not required to offer all ten Medigap options, but those that offer Medigap are required to provide Medigap Plan A, which is the most basic plan, and includes coverage of Medicare Part A coinsurance and hospital costs (up to 365 days once Medicare benefits are used up), Medicare Part B coinsurance or copayments, three pints of blood and Medicare Part A hospice care coinsurance. Services that are covered with more extensive Medigap policies include coinsurance for time in a skilled nursing facility, coverage of Medicare Parts A and B deductibles and travel health insurance.
It may be worth considering that according to the Kaiser Family Foundation, close to 60,000 South Dakota seniors opt for a Medigap plan, while only an estimated 12,000 of the state’s seniors choose Medicare Advantage. With this in mind, it’s good to know that Medicare Advantage is significantly more popular in South Dakota than it is in most other states. Finally, it’s necessary to know that South Dakota seniors cannot enroll in both Medigap and Medicare Advantage, and must choose between these two potentially excellent options.
Good news for South Dakota seniors is that there is a guaranteed acceptance for both Medicare Advantage and Medigap policies if enrollment is done during the senior’s personal enrollment period, which is the six month period surrounding his or her 65th birthday. The one exception to the guaranteed acceptance requirement is those who have end stage renal disease. Seniors who do not register for a Medicare supplement during their own open enrollment period will be required to wait until the national open enrollment period, which is generally between October 15 and December 7 yearly. Plans registered for during this time will be activated on January 1 of the following year. It is equally important to keep these dates in mind, as South Dakota seniors can only change or cancel their Medicare supplement policy during this time. (Some exceptions are made if a policyholder moves across county lines during the year and must reenroll with a local health insurance company).
Another benefit of all Medicare supplements is that registrants can have a full month to cancel their policy with no questions asked and a full refund granted. This provision is especially helpful to those who aren’t entirely sure if they need or want to supplement their Medicare coverage, but feel pressured to register during the open enrollment period.
Even seniors who are perfectly healthy when they reach the age of 65 are likely to face some health challenges as they age, many of which can be not only physically draining, but financially burdensome as well. Prices vary from provider to provide of both Medigap plans and Medicare Advantage plans, so make sure to get an ample number of price quotes before making your final decision, especially when choosing a Medigap plan, as these plans are identical in service from agent to agent. Choosing a Medicare supplement will require a higher monthly outlay than you would pay with a standard Medicare plan, but will provide you with the peace of mind that you will have coverage if and when the need arises.
Downtown Bellevue, just off I-405