dcsimg

Health Insurance Quotes

Find Affordable Health Insurance Now

Yes No
Yes No

Medigap insurance: Covering what Medicare doesn't

Medicare Open Enrollment is currently open now through December 7, 2016.

If you're 65 or older and eligible for Medicare, the federal health insurance program, you have some choices to make, such as: Enroll in Original Medicare, possibly adding Medigap insurance, or choose a Medicare Advantage (MA) plan.

What is Medigap?

Medicare doesn't pay for every charge or service. You could be responsible for a percentage of your medical bills and out-of-pocket expenses. To help pay those bills, Medicare supplemental insurance, also known as Medigap, is available.

Medigap work with Original Medicare, which has two parts: A and B. Part A pays for inpatient hospital, skilled nursing facility, home health and hospice care. Part B pays for doctors' visits, outpatient hospital care, durable medical equipment and other medical services.

Private insurance companies sell Medigap policies to cover Medicare coinsurance, co-payments and deductibles that you otherwise would have to pay yourself. Depending on the policy you choose, it could pay for costs that Original Medicare doesn't cover, such as prescription drugs. You may need to buy a separate policy or Part D drug plan for drug coverage. Note: You are likely to pay a penalty for drug coverage if you add it later, rather than when you first enroll.

What is Medicare Advantage?

Medicare Advantage plans are an alternative to Medicare. These plans are purchased through private insurers and generally consolidate benefits from Medicare parts A and B.

MA is sometimes called Part C and is usually an HMO or PPO, says Patricia Barry, AARP's "Ms. Medicare" columnist and author of "Medicare for Dummies, 2nd Edition." With most Medicare Advantage plans, you must use doctors, hospitals and other providers in the plan or you pay more or all of the costs. Most MA plans include prescription drug coverage, but not all, so be sure to check if you want it, Barry says.

It's important to understand that Medicare Advantage doesn't work with Medigap policies. You can purchase one or the other, but not both.

10 Standardized Medigap Plans

Depending on where you live, you may have a choice of 10 standardized Medigap policies that the federal government has authorized. They are identified by letters: A, B, C, D, F, G, K, L, M and N.

"The point about standardization," Barry says, "is that each policy that has the same letter has the same set of benefits regardless of which insurance company sells it." However, she says, while the benefits under each letter are standard, the costs are not. "Insurance companies charge a wide variety of premiums," she says. Note: if you live in Massachusetts, Minnesota or Wisconsin, insurance companies are allowed to sell somewhat different combinations of benefits.

To find the plan that's best for your age, health and financial situation, review your choices every year during the annual Medicare open enrollment occurring each fall.

You don't have to do anything if you want to keep the supplemental insurance plan that you already have. However, your insurance plan is required to notify you of any changes in coverages and prices that will take effect Jan. 1 and you should review your choice to be sure it's still the best for you, Barry recommends.

Make sure the medications you take are still covered under your plan and whether your doctors and hospitals are still part of it. "If you don't scrutinize and compare what's available very year, you're probably not getting your best deal," Barry adds.

The Plan Finder on Medicare's website is a great resource, Barry says. "You enter your zip code. Don't bother saying whether your health status is good. That's optional. Hit "continue" and you will see what plans are available where you live and what they cover and what they don't." You also can enter the medications you take and their dose to see if they are part of the plan you're considering. The results will be organized by plan type and are initially sorted by lowest estimated cost to highest.

You also can use the chart below from Medicare.gov to view differences among the plans. For example, Plans A and B do not offer emergency coverage if you travel abroad. Is that important to you?

Yes means it covers 100 percent for this benefit; No means it offers no coverage for this item; and the percentage is the percent that the plan covers for each benefit. N/A is not applicable.

Medigap Benefits

Medigap Plans

A

B

C

D

F1

G

K

L

M

N

Part A coinsurance and hospital costs up to an additional 365 days after Medicare benefits are used up

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Part B coinsurance or copayment

Yes

Yes

Yes

Yes

Yes

Yes

50%

75%

Yes

Yes2

Blood (first 3 pints)

Yes

Yes

Yes

Yes

Yes

Yes

50%

75%

Yes

Yes

Part A hospice care coinsurance or copayment

Yes

Yes

Yes

Yes

Yes

Yes

50%

75%

Yes

Yes

Skilled nursing facility coinsurance

No

No

Yes

Yes

Yes

Yes

50%

75%

Yes

Yes

Part A deductible

No

Yes

Yes

Yes

Yes

Yes

50%

75%

50%

Yes

Part B deductible

No

No

Yes

No

Yes

No

No

No

No

No

Part B excess charges

No

No

No

No

Yes

Yes

No

No

No

No

Foreign travel exchange (up to plan limits)

No

No

80%

80%

80%

80%

No

No

80%

80%

Out-of-pocket limit3

N/A

N/A

N/A

N/A

N/A

N/A

$4,940

$2,470

N/A

N/A

1Plan F also offers a high-deductible plan.

2 Plan N pays 100 percent of the Part B coinsurance, except for a copayment of up to $20 for some office visits and up to a $50 copayment for emergency room visits that don't result in your being admitted to the hospital.)

3After you meet your out-of-pocket yearly limit and your yearly Part B deducible, the Medigap plan pays 100 percent of covered services for the rest of the calendar year.

The cost of your Medigap policy also depends on whether or not the insurance company offers discounts. Some firms offer discounts for women, non-smokers, or married couples. Some also offer discounts for paying yearly, paying premiums via electronic funds transfer, or for multiple policies.

Remember that unlike other insurance plans that cover families, Medigap plans only cover individuals. Spouses must each get their own policies.

Medigap policies don't cover long-term care either. If you want long-term care, buy a separate policy and from a company that offers it.

If you need dental and vision care, look into Medicare Advantage plans as some of them include these coverages.

Another Medigap Option: Medicare SELECT

In some states, you may have another option: Medicare SELECT. Medicare SELECT can be any of the standardized plans lettered A through L above, but these plans require that you use specific hospitals and, in some cases, specific providers to receive full benefits, unless it's an emergency.

The advantage to Medicare SELECT is that the policies are generally sold at a lower cost than other Medigap insurance plans. "All the others you can use providers anywhere across the country for any services that Medicare covers within the U.S.," Barry says. "With Medicare SELECT, you're confined to a geographic area." Medicare still pays its share of approved charges no matter which hospital or doctor you choose.

If you don't have health insurance from an employer, the military or elsewhere, it's important to enroll in Medicare when you are first eligible, Barry says. You can sign up during the 7-month period that begins three months before the month you turn 65, includes the month you turn 65, and ends three months after the month you turn 65. You could be subject to an ongoing late enrollment penalty if you don't sign up during the eligibility period.

More from Beth Orenstein here

Ready to get a quote?

Get quick and easy health insurance quotes


Yes No