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Medigap insurance: Filling in Medicare's gaps

When you qualify for Medicare, policy choices abound. Will you be choosing Original Medicare or a Medicare Advantage Plan? Will you need Part D prescription coverage?

If you enroll in Original Medicare, Part A pays for care in a hospital or skilled nursing facility, as well as for home health and hospice care. Medicare Part B pays for treatment by physicians, outpatient hospital care, durable medical equipment and other medical services. But Medicare does not pay every medical charge or service. Depending on your health situation, you could be open to a variety of out-of-pocket medical expenses.

The federal government has authorized 10 standardized Medigap policies.

Enter Medicare supplement insurance — also known as Medigap policies — to plug the gaps left in Original Medicare. (Those with Medicare Advantage Plans are not eligible for Medigap policies.) Medigap policies are private insurance policies that cover Medicare coinsurance, co-payments and deductibles that you'd otherwise have to pay yourself. Some Medigap policies also pay for costs not covered by Original Medicare.

The 10 letters of Medigap

The federal government has authorized 10 standardized Medigap policies: Plans A through N. Depending on where you live, all 10 of these standard policies — or only a few — may be offered. If an insurance company wants to sell Medigap policies, it must sell at least Plan A. However, if an insurance company sells any other type of policy, aside from Plan A, it must also offer Plans C or F.

To purchase a Medigap policy that's right for your situation, you need to review the choices annually to make sure your Medigap plan still fits your needs. Plan A offers a very basic supplement to Medicare coverage. Plan F offers much more coverage but is also more expensive. Plans K and L offer payment of 50 or 75 percent on certain co-payments, coinsurance and deductibles. Don't confuse the Medigap policy designations with Medicare Parts A and B.

Each plan letter's coverage is the same from insurance company to insurance company. For example, no matter which company is selling the policy, Plan C will contain the same coverage. (However, insurers in Massachusetts, Minnesota and Wisconsin are permitted to sell somewhat different combinations of benefits.

Medigap policies will generally pay most or all of the Medicare coinsurance amounts and Medicare's deductibles. Certain plans will also pay for emergency medical care in a foreign country. (See chart below.) No plan will cover prescription drugs; for that you need to sign on with a Medicare prescription plan.

Also, your Medigap plan will not cover your spouse; you'll each need your own policy.

Medigap policies don’t cover long-term care (like care in a nursing home), vision or dental care, hearing aids, eyeglasses or private-duty nursing.


Medigap Beneifts A B C D F* G K L M N
Medicare Part A Coinsurance hospital costs up to an additional 365 days after Medicare benefits are used up X X X X X X X X X X
Medicare Part B Coinsurance or Copayment X X X X X X 50% 75% X X**
Blood (First 3 Pints) X X X X X X 50% 75% X X
Part A Hospice Care Coinsurance or Copayment X X X X X X 50% 75% X X
Skilled Nursing Facility Care Coinsurance     X X X X 50% 75% X X
Medicare Part A Deductible   X X X X X 50% 75% 50% X
Medicare Part B Deductible     X   X          
Medicare Part B Excess Charges         X X        
Foreign Travel Emergency (Up to Plan Limits)     X X X X     X X
Medicare Preventive Care Part B Coinsurance X X X X X X X X X X

* Plan F offers a high-deductible option ($2,000 in 2010).

**Plan N has copyaments of up to $20 for office visits and up to $50 for emergency department visits. The 2010 out-of-pocket limit is $4,620 for Plan K and $2,310 for Plan L.

If you're interested in a Medigap policy, strike while the iron is hot! Your Medigap open enrollment period begins on the first day of the month in which you are age 65 or older and enrolled in Medicare Part B, and it lasts for six months. During this time, an insurance company can’t refuse to sell you any Medigap policy it sells, can't make you wait for coverage to start (except possibly for coverage of pre-existing conditions), and can't charge you more for a Medigap policy because of your health problems. (Medicare will still cover your pre-existing condition but you'll have to pay your own out-of-pocket costs.)

There's still another Medigap option. Medicare SELECT, sold in some states, can be any of the standardized Medigap Plans A through L except that you must use specific hospitals and, in some cases, specific doctors to get your full insurance benefits (except in an emergency). The advantage is that Medicare SELECT policies generally cost less than other Medigap policies. However, if you have a Medicare SELECT policy but don't use hospitals or doctors on the list for non-emergency services, you will have to pay some or all of what Medicare doesn’t pay. Medicare will still pay its share of approved charges no matter which hospital or doctor you choose.

For all the details about Medigap plans and enrollment, see the latest "Choosing a Medigap Policy" handbook at www.medicare.gov.

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