Medicare Supplement Plans in California

Medicare Supplement (also called Medigap) helps cover costs that Original Medicare doesn’t pay for, such as the 20% of Medicare Part B expenses that you are responsible for. Without this coverage, a serious illness could result in high out-of-pocket costs. By purchasing a Medicare Supplement plan, you minimize your financial risk and gain peace of mind.

What to Consider When Choosing a Medicare Supplement (Medigap) Plan

Medicare Supplement plans work alongside Original Medicare to cover additional costs like co-pays, coinsurance, and deductibles. Unlike Medicare Advantage plans, which replace Original Medicare, Medigap policies supplement it. Medicare Supplement plans are standardized and labeled with letters (A-N), and each lettered plan offers the same benefits regardless of the insurance company that provides it.

For example, Plan G from one insurer will offer the same coverage as Plan G from another, but pricing may vary. If you’re new to Medicare, note that Plans C and F are no longer available to people who became eligible on or after January 1, 2020.

High-Deductible Plans

For those seeking a lower premium, high-deductible versions of Plan F and Plan G are available. These plans have a deductible of $2,340 in 2020, meaning you must pay for covered costs up to that amount before the policy pays anything.

Medicare SELECT Policies

Some insurance companies offer Medicare SELECT policies, which may have lower premiums but require you to use a network of providers. These policies are less common, so consult with a Medicare advisor to determine if they are a good option for you.

Excess Charges and Medicare Assignment

Medicare allows doctors who don’t accept Medicare Assignment to charge up to 15% more than Medicare’s approved rate for services. Plan G covers these excess charges at 100%, protecting you from additional out-of-pocket costs if your provider does not accept the approved Medicare payment.

Prescription Drugs and Medicare Supplement Plans

Medicare Supplement plans do not cover prescription drugs, so if you need drug coverage, you will need to enroll in a separate Part D plan.

When to Enroll in a Medicare Supplement Plan

The best time to enroll in a Medicare Supplement plan is during your six-month Medigap open enrollment period, which begins when you turn 65 and sign up for Medicare Part B. During this period, you can purchase any Medicare Supplement plan without medical underwriting, meaning you cannot be denied coverage due to pre-existing conditions.

If you miss this window, you may face higher premiums or limited plan options, though some exceptions apply (such as losing employer-based coverage). Working with a Medicare advisor can help you navigate these options.

Unique Rules in California: The Birthday Rule

California has a unique “Birthday Rule” allowing you to switch to a Medicare Supplement plan with equal or lesser benefits within 60 days after your birthday, with guaranteed issue rights. This means you can’t be denied coverage based on pre-existing conditions.

Pricing and Rate Increases

Medicare Supplement premiums may increase over time due to factors such as inflation or age. There are different pricing models:

  • Community-rated: Premiums do not increase based on age.
  • Issue-age-rated: Premiums are based on your age when you first purchase the policy.
  • Attained-age-rated: Premiums increase as you get older.

Choosing the right Medicare Supplement plan in California can be complex, so it’s important to work with an independent Medicare advisor who understands the state’s specific rules and can help you find the best plan for your situation.

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