Choosing a Medicare supplement insurance plan
Q: Can you expand on the difference between the various Medigap plans and which options are no longer available? A: An excellent source of information on Medigap alternatives is “Medicare & You 2023,” the official U.S. Medicare handbook. The publication is free, and it is mailed to each Medicare household each fall.
At medicare.gov, you can download the booklet as a PDF; it’s available in several languages and in large print format. You can also download it as an ebook for Kindle. If you need it in Braille or in audio format, or if you would like to be sent a printed version, call 1-800-MEDICARE or TTY 1-877-486-2048.
The part of “Medicare & You 2023” that relates to this question is section 5, “Medicare Supplemental Insurance.”
Medigap policies are sold by private companies, and they are meant to help those who have Original Medicare pay some remaining health care costs for services and supplies, such as copayments, coinsurance and deductibles.
There are 10 Medigap plans, and the benefits offered by each of these plans are itemized conveniently in a chart contained in section 5 of “Medicare & You 2023.” Generally, Medigap doesn’t cover longterm care, vision or dental services, hearing aids, eyeglasses or private-duty nursing.
Medigap must follow federal and state laws, which are structured to provide you protection. All of the plans offered provide the same basic benefits, but some, such as Plan G, offer additional benefits. In Massachusetts, Minnesota and Wisconsin, Medigap plans are standardized in a different way. If you live in one of these states and want more information, go to: Medicare.gov/ medigap-supplemental-insurance-plans.
Medicare plans available to people who were new to Medicare on or after Jan. 1, 2020, are not allowed to cover the Part B (medical insurance) deductible. Because of this, Medigap Plans C and F are no longer available to individuals new to Medicare on or after Jan. 1.
However, if you were eligible for Medicare before Jan. 1, 2020, but not yet enrolled, you may be able to purchase Plan C or F. Individuals new to Medicare after Jan. 1, 2020, have the right to purchase Plans D and G instead, which are comparable in coverage.
The best time to purchase a Medigap policy is during your Medigap open enrollment period. This six-month period begins the first month you have Medicare Part B and you are 65 or older. (Some states have additional open enrollment periods.) After this enrollment period, you may not be able to purchase Medigap. It may cost more. If you delayed enrolling in Part B because of your or your spouse’s current employment, your Medigap Open Enrollment Period won’t start until you sign up for Part B.
If you want unbiased advice regarding purchasing Medigap or Medicare Advantage plans, you can request free advice from a representative of your State Health Insurance Assistance Program (SHIP). You can obtain your state’s contact phone number from the internet or from the back of your Medicare handbook.
Q: I have a pension plan and am required to take required minimum distributions (RMDs) from the plan each year. I also make yearly charitable deductions. I would like to take advantage of the qualified charitable distribution (QCD) option. I am allowed to do a rollover to a traditional IRA from my pension plan. My adviser suggested that I do a rollover to an IRA this year and make a charitable gift through the custodian of the IRA. A:
I reviewed this option with an attorney from Ed Slott and Co. (IRAhelp.com). She indicated that you could do a QCD this year from the newly created IRA. However, since there was no IRA balance in the IRA at the end of 2021, there is no tax advantage for you this year from the QCD. You would have a charitable tax deduction only if you itemize. Next year, because there would be an IRA balance at the end of 2022, you could make a QCD in 2023 and receive a tax deduction on your 2022 tax return because you will have an IRA balance at the end of 2022, and a required RMD based on your age and the IRA balance at the end of 2022. It is true that you can only take a tax deduction associated with a QCD from an IRA, not a pension plan.