Medicaid Supplemental Insurance: An Introduction

Do you or does someone you love depend on Medicare for health care coverage? Are you wondering how Medicare coverage can be supplemented, either with another policy or by Medicaid as a secondary insurance provider?

Supplemental or secondary health insurance helps cover health care costs that aren’t usually covered by typical health insurance. Some supplemental insurance companies cover certain situations, such as hospital or disability insurance. Others pay for certain health conditions such as cancer.

When supplemental health insurance isn’t an option, Medicaid can act as secondary insurance for those who qualify.

Keep reading to learn more about supplemental insurance and how Medicaid may work as secondary insurance to Medicare in some situations.

What Is Medicare Supplemental Insurance?

Supplemental insurance refers to additional or extra insurance that helps to cover the services and out-of-pocket expenses that an individual’s primary Medicare insurance doesn’t cover.

Some supplemental insurance plans will cover the out-of-pocket cost-sharing that comes with your health insurance plan, such as deductibles, coinsurance, and co-payments. They may also cover medical services that your usual health service plan doesn’t cover at all, including dental and vision fees.

Other supplemental plans may provide a cash benefit paid out over a certain time frame or provide it in one lump sum.

This cash may be used for:

  • Covering lost wages
  • Transportation related to your health condition
  • Food, medication, and other unexpected costs you have due to an illness or injury

Examples of supplemental health insurance include:

  • Dental insurance
  • Critical illness insurance
  • Vision insurance plans
  • Disability insurance
  • Travel insurance for health care coverage when you are outside your health insurance system
  • Long-term care insurance
  • Medicare supplement plans
  • Cancer policies
  • Accidental death and dismemberment insurance
  • Hospital indemnity insurance

In cases where all other options for payment have been expended, Medicaid can serve as secondary insurance to Medicare.

What Is Medicare Supplemental Health Insurance?

Medicare is primary health insurance for many Americans over 65 and people with disabilities. However, not everything is covered in Medicare. As a result, you can extend your original Medicare (parts A and B) benefits with one of several Medicare supplement possibilities.

A Medicare supplement plan is also known as Medigap. It can help cover some of the costs that Original Medicare doesn’t. Medicare supplement insurance helps fill in the ‘gaps’ that original Medicare misses.

Supplemental Medicare plans are sold by private insurance companies.Such plans can assist with copays, coinsurance, and deductibles. Some plans also help cover medical care when you’re abroad.

If you already have original Medicare and you purchase a Medigap policy, Medicare will cover its share of the Medicare-approved share for covered health care fees. Then, your Medigap policy pays its amount.

Remember, Medigap policies don’t pay for everything.

Usually, Medigap policies don’t cover the following:

  • Long-term care
  • Vision care
  • Dental care
  • Hearing aids
  • Eyeglasses,
  • Private-duty nursing

What Do Medigap Plans Cover?

There are 10 Medigap plans available for purchase: A, B, C, D, F, G, K, L, M, and N. Some Medigap plans cannot be purchased by new Medicare members. These include policies C, F, E, H, I, and J.

But, if you already have one of these policies, you can keep it. If you qualified for Medicare before January 1, 2020, you could still purchase Plan C or Plan F.

Most of the Medigap policies vary in what types of copayment, coinsurance, or other medical costs they cover. But, all Medigap policies cover at least some, if not all of:

  • Medicare Part A coinsurance and hospital fees
  • Medicare Part A hospice coinsurance or copayment costs
  • Medicare Part B coinsurance or copayment costs blood transfusion costs, up to the first three pints

Additionally, some Medigap plans also cover:

  • Expert nursing facility fees
  • Medicare Part A deductible
  • Medicare Part B deductible
  • Medicare Part B excess charges
  • Emergency medical fees during travel abroad

Insurance Plans That Aren’t Medigap

It’s easy to confuse some insurance plans for Medigap.

Some insurance plans that are not Medigap include:

  • Medcaid
  • Medicare Advantage Plans (like an HMO, PPO, or Private Fee-for-Service Plan)
  • Medicare Prescription Drug Plans
  • Employer or union plans, such as the Federal Employees
  • Health Benefits Program (FEHBP)
  • Veterans’ benefits
  • Long-term care insurance policies
  • Indian Health Service, Tribal, and Urban Indian Health plans

What’s Medicaid Secondary Health Insurance?

Now let’s cover how Medicaid can serve as secondary health insurance to Medicare.

Medicare is the primary payer for services it covers. These services commonly include visits to the doctor’s office as well as care in a hospital, at home, or in a skilled nursing facility. When a covered person obtains services from a provider that accepts both Medicare and Medicaid as forms of coverage, Medicaid may cover shared Medicare costs such as copays and coinsurance.

Depending on income, Medicaid may provide cost-sharing help through the Qualified Medicare Beneficiary program. The program may also provide assistance with the cost of prescription drugs or optional coordination of care.

That’s why it’s important to know whether you are eligible for Medicaid and, if so, to be sure to apply for the program.

Whenever possible, it’s also important to ask your providers about your coverage and costs before receiving services.

If you currently carry a Medigap policy and are looking for Medicaid to replace it, make sure you understand the ramifications of cancelling that coverage and are fully approved for Medicaid before making any changes.

Dropping Your Whole Medigap Policy

You may decide that you want a completely different Medigap policy and not just your old Medigap plan without the prescription drug coverage. Or you may want to move to a Medicare Advantage Plan that provides prescription drug coverage. You may also decide that you want to drop your Medigap policy entirely.

If you want to drop your whole Medigap policy, you must be careful regarding timing. Make sure you understand cancellation and coverage start dates so you aren’t left without necessary coverage.

Ask questions of your providers to be sure all your needs will be covered before making any changes.

Are Supplemental Insurance Plans Worth It?

Whether you require supplemental health insurance depends on various factors.

These include:

  • Your risk factors
  • The premiums
  • How much insurance you prefer
  • What you want to be insured for
  • How much insurance, if any, fits your budget

Your savings situation should play an essential role in your choice whether to invest in Medicare supplemental insurance. If you were in the hospital for a couple of weeks or longer, would you have enough money to pay for your deductible, copays, and coinsurance? For many people, this is a very tall order.

Do you have accessible money through an HSA or FSA? If you do, then investing in supplemental health coverage may not be worthwhile.

Medicare supplemental insurance is most helpful if you think you may not have the money to cover unexpected medical bills. Look at the deductible, copays, and coinsurance on your health insurance plan and determine your chances of requiring supplemental coverage.

Assessing your family health history can also give you a suggestion of potential risks. Of course, it’s essential to measure how much you can afford to spend in insurance each month and how much you can afford if a severe illness or accident occurs.

If you are unable to afford a Medicare supplemental policy, Medicaid may act as secondary insurance for qualified applicants. If you think you may qualify for Medicaid, it’s best to apply before incurring any medical charges.

What You Should Know About Medigap Policies

There are several things you should know about Medigap policies.

The first is that you must have Medicare Part A and Part B.

Next is that a Medigap plan is different from a Medicare Advantage Plan. Those policies offer ways to receive Medicare benefits, but a Medigap plan supplements your original Medicare advantages.

You must also pay a supplemental insurance company a monthly premium to receive your Medigap plan. You pay for this monthly premium as well as the monthly Part B premium that you provide to Medicare.

It’s also essential to know that a Medigap policy only covers one individual. If you and your partner both want to receive Medigap benefits, you must both pay for separate plans.

It’s possible to buy a Medigap plan from any insurance company licensed in your state to sell one.

Any standardized Medigap policy is guaranteed renewable even if you have health issues. So, the insurance company can’t cancel your Medigap plan as long as you cover the premium.

You should also know that some Medigap plans sold in the past cover prescription drugs. However, Medigap plans sold after January 1st, 2006 aren’t enabled to include prescription drug coverage. If you require prescription drug coverage, you can get a Medicare prescription drug plan (Part D).

If you decide to buy a Medigap and a Medicare drug plan from the same insurance company, you may need to make two separate premium payments.

Get in touch with the company to discover how to pay your premiums.

Finally, it’s illegal for anyone to try to sell you a Medigap policy if you have a Medicare Advantage plan unless you’re moving back to original Medicare.

if you cannot afford a Medigap policy, Medicaid may provide assistance.

Is Medicare Supplemental Insurance Right for You?

Medigap plans are a supplemental insurance option for those already enrolled in original Medicare who are seeking extra financial coverage. When you participate in a Medigap plan, you’ll receive coverage for specific costs like deductibles, coinsurance, and copayments. But you’ll still need to cover some out-of-pocket expenses for the services you receive.

Remember, however impressive the terms of Medicare supplemental insurance may be, the plans aren’t designed to stand alone or replace your regular health insurance.

Supplemental insurance is how it sounds: a supplement. Before signing a policy, make sure that you completely understand the advantages and limitations of the policy. If you don’t, it’s best to perform some more research or reach out to Medicare for more information.

If you cannot afford Medigap or Medicare supplemental insurance, Medicaid may cover those costs that Medicare does not.

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