One reason that it's so difficult to keep up with Medicare is that it's constantly changing. The government is always adding or taking away restrictions on health care. Not only does Medicare coverage continue to change, but supplemental insurance continues to cover as well.
Medicare is an excellent government program, and it help provide health care coverage to millions of seniors across the nation, but it doesn't cover everything. In fact, there are a dozen different expense categories that Medicare Parts A and B don't cover. Those expenses could leave you with massive medical bills and hospital fees.
Those massive bills could turn your retirement dream into a nightmare. It's important that you get the health care coverage that you need to ensure that you aren't responsible for hospital bills that would drain your bank account.
Every year, I get a lot of questions about Medigap Plan J, which is no longer available. It's important that you understand all of the plans, and if you have a Plan J, you will need to understand your coverage and some other similar options.
What is a Medicare Supplemental Plan J?
Medigap plans are sold by private insurance companies, and they work together with your original Medicare Parts A and B to give you additional coverage that you wouldn't get with just your traditional coverage. There are ten different supplemental plans that you can choose from, all of them are going to have different coverages and gaps that they fill.
Some plans are going to be more basic than others. A Medigap Plan A is going to be one of the most basic, and it's going to leave more gaps in coverage than other plans, like supplemental Plan F, which is the most comprehensive policy.
Plan J was one of the most popular options for Medigap coverage because of the additional insurance protection that it provided to enrollees. If you have a Plan J still, then you have the most coverage that you can buy. In fact, the law no longer allows you to get some of the coverage.
With your Plan J, you will get the basic coverage categories, like Part A coinsurance and hospital costs for an additional 365 days after your original Medicare coverage has expired. If you've ever stayed the night in a hospital for whatever reason, you know that it can be an expensive stay. With traditional Medicare, you will get some hospital fee coverage, but after that coverage ends, you'll be responsible for all of those bills out-of-pocket. With a Medicare Plan J (or any supplemental plan for that matter), you will get additional coverage that can protect your savings if you're ever in the hospital for several weeks.
Some of the additional coverage that came with a Plan J was paying the Part A and B deductible. The deductible is the amount that you have to reach before your Medicare coverage kicks in. If you had a Plan J, then you wouldn't be responsible for paying that bill. Every year, the Part B deductible changes. In 2017, this threshold is $183.
Plan J would also pay for any Part B excess charges. When you go to the doctor or hospital to get any service, there is a pre-determined amount that Medicare B will pay. The doctor is legally allowed to charge 15% more than that amount. Anything about that pre-determined amount is considered excess charges. If you don't have supplemental coverage, you will have to pay for all of those excess bills out of your pocket.
One of the unique coverage categories of Plan J was the prescription coverage that it provided. Plan J will help cover some of the rising costs of medications. The prescription coverage was one of the main reasons that Plan J was so popular.
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What Happened to Medigap Plan J?
As I've already mentioned, Medigap Plan J is no longer available. There were several changes in the early 2000s that make these plans unavailable for new enrollees. Congress passed the Medicare Prescription Drug, Improvement, and Modernization Act, which changed the way that Medicare was structured. When this act was completed, the started Medicare Part D prescription drug coverage.
Once Part D began, it meant that Plan J was providing duplicated coverage, and that Plan J was now obsolete. The new law made it illegal for any supplemental coverage to pay for medication expenses, which meant like Plan J was identical to Plan F, and there was no reason for having two identical plans. If you held a Plan J at that point, you could keep your supplemental coverage, and you weren't required to switch policies.
After that point, nobody else was able to enroll in Plan J, but there were several other quality options that you could choose from. It's vital that you get the perfect supplemental insurance for your health care needs.
The obvious alternative to Plan J is to purchase a Plan F. The plans are identical minus the prescription coverage that Plan J is no longer allow to give to its enrollees. Plan F will give you all of the comprehensive coverage that the other plans won't provide. If you want to get the most coverage possible, then a Plan F is going to be the best choice.
On the other hand, if you decide that you don't want as much coverage, and you would rather save money, then a smaller plan is going to be a much better option. A Medigap Plan A or B will fill in a few of the gaps that Medicare doesn't pay for. With a smaller plan, you won't get as much additional coverage, but you are going to save money every month.
Deciding Which Plan
There are several different factors that you will need to consider when you're shopping for supplemental insurance coverage. The first factor that you will need to look at is your finances. Everyone would love to have a Plan F which gives the most coverage, but not everyone can afford that comprehensive plan. Before you purchase any additional coverage, take a look at your budget and decide how much you can spend every month on that supplemental protection. The goal of your Medigap policy is to protect your savings, but the plan shouldn't break your bank every month.
The next factor that you need to answer is your medical history and your family tree. The older that you get, the more that you're going to spend on health care, and those expenses could drain your savings account, but that's where your Medigap plan comes in. If you're in poor health, then you will need to purchase a comprehensive policy that gives you the most coverage possible.
Medigap Open Enrollment
One of the most important things to realize about Medigap plans is when you should purchase one of these plans. Once the month that you turn 65 begins, your Medigap Open Enrollment Period begins. During this time, the insurance company can't decline your application, regardless of your health or any health complications that you may have. If you're in terrible health, this could be the only chance that you have to get coverage.
Additionally, if you apply during the open enrollment, the company can't increase your premiums, even if you have health complications. If you want to save money, it's vital that you apply during the six-month window of open enrollment. After the six months is over, then your application will be treated as a normal application, which means that you could get drastically higher premiums.
Any Questions about Medigap Plan J?
Because Plan J is no longer available, I don't get a lot of questions about the plan, but there are still people with these plans. It's vital that you get the perfect supplemental coverage. You've worked hard to reach this stage of life, don't let medical bills wreck your retirement dream.
If you have any questions about Medigap Plan J or any of the alternatives, please contact an experienced Medicare supplemental insurance agent or me today.