Medicare Supplement (Medigap) Plan M can be a terrific money-saving choice for Medicare-eligible seniors. It is similar to a Medigap Plan D with only one difference. A Plan D pays 100% of the Part A Deductible, so you pay nothing; with a Plan M, the company pays 50%, so you pay the remaining 50%.
In 2016, the Part A Deductible is $1,288 per Benefit Period. A Benefit Period begins the first day you enter the hospital and ends 60 days after leaving the hospital. Technically, this could happen up to 5 times within a calendar year, but that is very unlikely.
A Medigap Plan M is an option if you don’t expect to be hospitalized.
Obviously, we can’t predict the future, but taking into account your current health, and health history you can make a reasonable assumption of your chances. Because anyone who expects to be hospitalized wouldn’t buy a Plan M, you end up with a healthier group of insureds in the plan; this is the number one reason for choosing Plan M. Healthier insureds mean fewer rate increases in the future, saving you money in the long-term.
Up until recently, only a few companies offered a Medigap Plan M.
Since so few of these plans were sold in the past, most companies didn’t bother to offer it, but this is changing. If there is a Plan M available in your state, and you are considering purchasing one, it could be a good option, but do your homework first. Before you buy, ask your agent how many insureds are currently in a plan. Rate increases are much harder for companies to manage when there is a small number of insureds in a plan. Insurance works because of the law of large numbers.
Another thing you will want to consider before purchasing a Plan M is how the rates compare to a Medigap Plan G or a Medigap Plan N in your area. In my opinion, the former are better options unless the Plan M rate is significantly lower.
At Medigap Planners, we will do a comprehensive evaluation of the Medicare Supplement market before offering a recommendation. Give us a call for more information.