Medigap Plan M is one of the newer supplements created by the government’s Medicare Modernization Act. It first became available for purchase as a supplemental to Original medicare in the summer of 2010. (At times you may hear people refer to this coverage as Medicare Part M or Medigap Part M, however, you should know that this is no Medicare Part M, they really mean Plan M.)
A Medigap Plan M works with your Original Medicare provides the same basic benefits as other supplements. It does, however, offer a somewhat reduced monthly premium in exchange for having you take on more cost sharing than others that are available. For example with a Medicare Plan M you’re responsible to pay for half of your hospital deductible if you become an inpatient and you’ll pay all of the annual outpatient deductibles. What is the benefit to taking on my of the cost sharing? Whenever a consumer is willing to purchase a plan that has increased out-of-pocket costs, you get the benefit of reduced premiums. It’s like your in effect bargaining with your insurance company. In other words, your Medicare Plan M company basically is saying to you that the more cost-sharing you’re willing to accept, the lower your monthly premiums will be.
Plan M is especially a good fit for someone who is healthy and doesn’t expect to visit the hospital much and also feels they could afford to pay the occasional cost-sharing associated with this particular plan. It’s important to have a medicare specialist discuss your personal situation and what your goals are for your healthcare, so contact our licensed agent who specializes in Medicare supplements to help you. He or she will help you compare the differences in premiums and make sure the savings you could achieve by purchasing a Medicare Plan M is really worth the risk of having the out-of-pocket costs.
John Wilson meets with his insurance agent and decides to buy a Medigap Plan M as his coverage. He believes that the savings on the premiums with a Plan M outweighs the potential cost sharing he may have from time to time. In other words John is cheap and he wants to save money on his monthly premiums so he purchases a Medicare Plan M. He also has a decent savings that he could use to pay for the 50% co-insurance on the Medicare Part A deductible that he may incur if he ends up as an inpatient in the hospital. After a few years into his policy, it turns out he has a medical condition requiring surgery along with an overnight stay in the hospital. John will pay $670 in 2018 for his share (50%) of the Hospital Part A deductible.
Medicare Plan M will also cover most of his out-patient followups. Though he has to first pay the annual Medicare Part B deductible for his outpatient services, Medicare pays 80% of his outpatient care afterwards. His Medicare Supplement Plan M pays the rest. If his surgeon doesn’t accept the Medicare assigned rates, he will also have to pay any Part B excess charges. The government allows excess charges whenever a provider has not contracted with Medicare and doesn’t accept the standard payment that the government has established as reimbursement for the medical provider, in this case, the surgeon. However, the excess charges are limited to 15% above what Medicare normally pays a provider. Since Medicare is allowing the excess charge, they are not going to pay any of it, John must come out of his pocket to pay these charges. But John knew he would have this charge, he felt that the potential cost sharing on excess charges is minimal enough when compared with the lower premiums he gets.
Keep in mind that every Medicare supplement insurance carrier is a private insurer that chooses which plans it will offer for sale unless state law requires a carrier to offer certain plans. Because most people do not fully understand the concept of cost-sharing, they tend to get nervous about the idea, and therefore few carriers offer Plan M. If you are really interested in evaluating your situation to see if a Medicare Supplement Plan M is right for you, please contact our Medicare Coverage
Helpline and get assistance from our licensed Medicare specialist by calling 1-866-936-3831.