Your Guide to Understanding and Choosing the Right Supplement to Original Medicare
What is Medigap?
- Original Medicare covers many healthcare services but not all expenses, leaving beneficiaries with out-of-pocket costs like deductibles, copayments, and coinsurance.
- Medigap policies are sold by private insurance companies to cover these additional costs, providing financial security and reducing unexpected medical bills.
- Medigap plans are standardized and regulated by the federal government, offering the same basic benefits regardless of the insurance company.
- Example: Medicare Plan F covers all Part A and Part B deductibles, copayments, and coinsurance, ensuring predictable healthcare costs and access to any doctor or hospital that accepts Medicare.
What are the Different Medigap Plans Available?
Medigap plans are standardized across most states and labeled A, B, C, D, F, G, K, L, M, and N.
- Plan A: Basic benefits including hospital coinsurance and costs after Medicare benefits are exhausted.
- Plan B: Includes Plan A benefits plus coverage for the Medicare Part A deductible.
- Plan C: Comprehensive coverage, including both Part A and Part B deductibles (not available to new enrollees post-2020).
- Plan D: Similar to Plan C but without coverage for the Part B deductible.
- Plan F: Most comprehensive, covering all deductibles and coinsurance (not available to new enrollees post-2020).
- Plan G: Similar to Plan F but excludes the Part B deductible.
- Plan K and L: Lower premiums with higher out-of-pocket costs, offering partial coverage for services.
- Plan M: Covers half of the Part A deductible and none of the Part B deductible.
- Plan N: Covers Part A deductible and offers lower premiums with copayments for some services.
Each plan offers the same benefits regardless of the insurer.
How Does Medigap Differ from Medicare Advantage?
- Supplemental insurance covering out-of-pocket costs not paid by Original Medicare (e.g., deductibles, copayments, and coinsurance).
- Works alongside Original Medicare, providing coverage nationwide from any provider that accepts Medicare.
Medicare Advantage (Part C):
- An alternative to Original Medicare, offered by private insurance companies, typically including Parts A, B, and often D (prescription drug coverage).
- Often has network restrictions requiring beneficiaries to use specified networks of doctors and hospitals.
- May offer additional benefits like vision, dental, and hearing coverage.
Medigap provides consistent, predictable costs and broader provider flexibility, while Medicare Advantage may offer lower premiums but can include higher out-of-pocket costs and network restrictions.
What Does Medigap Cover?
Coverage can include:
- Part A hospital coinsurance and hospital costs up to an additional 365 days after Medicare benefits are exhausted.
- Part A deductible.
- Part B coinsurance or copayment.
- The first three pints of blood.
- Part B excess charges.
- Foreign travel emergency care (up to plan limits).
Example:
Medicare Plan F covers all deductibles and coinsurance for Parts A and B, ensuring minimal out-of-pocket expenses. Plan G covers everything except the Part B deductible. Plan N provides lower premiums but includes copayments for some services.
Who is Eligible for Medigap?
The best time to enroll is during the Medigap Open Enrollment Period, starting on the first day of the month you turn 65 and are enrolled in Part B, lasting six months.
- Eligibility requires enrollment in both Medicare Part A and Part B.
- During this period, you have a guaranteed right to buy any Medigap policy sold in your state, regardless of health status.
- After this period, you may face medical underwriting, making coverage more expensive or potentially denied based on health conditions.
- Special circumstances, like losing other health coverage, can grant guaranteed issue rights to enroll outside the open enrollment period without medical underwriting.
- Some states offer Medigap plans to individuals under 65 with disabilities or certain medical conditions.
When Can I Enroll in a Medigap Plan?
Best time:
Medigap Open Enrollment Period (first day of the month you turn 65 and are enrolled in Medicare Part B, lasting six months).
- Guaranteed right to buy any Medigap policy available in your state, regardless of health condition, during this period.
- Missing this window allows insurers to consider health status, potentially leading to higher premiums or denied coverage.
- Certain situations, like losing other health coverage, provide guaranteed issue rights for enrollment without underwriting outside the open enrollment period.
How Much Do Medigap Plans Cost?
Costs vary based on:
- Specific plan chosen.
- Geographic location.
- Age.
- Gender.
- Tobacco use.
Premiums can differ significantly between insurers for the same coverage.
Some states have community-rated pricing (everyone pays the same premium regardless of age), while others use issue-age or attained-age pricing (affecting premium increases over time).
Important to consider monthly premiums, potential out-of-pocket costs, coverage details, and insurer’s reputation when choosing a plan.
Comparing different plans and insurers helps find the best value.
Can I Switch Medigap Plans?
Switching is possible, but the process varies.
Outside Medigap Open Enrollment or guaranteed issue right periods, you may face medical underwriting.
- Insurers can deny coverage or charge higher premiums based on health status.
Compare benefits and costs of the new plan with your current one.
Consider implications of switching.
Guaranteed issue rights (e.g., losing other health coverage, moving out of your plan’s service area) allow switching without medical underwriting.
Review conditions and consult with a Medicare advisor for a smooth transition.
How Does Medigap Work with Other Insurance?
Medigap supplements Original Medicare by covering out-of-pocket costs like deductibles, copayments, and coinsurance.
Does not work with:
- Employer-provided insurance.
- Medicaid.
- Medicare Advantage plans.
Employer-provided insurance may render Medigap unnecessary until that coverage ends.
Medicaid beneficiaries typically find Medigap redundant as Medicaid covers many out-of-pocket costs.
Delaying Medigap purchases until employer coverage ends can prevent unnecessary overlap in benefits.
10. What are the Benefits of Having a Medigap Plan?
- Financial security by covering out-of-pocket costs.
- Predictability in managing healthcare expenses.
- Access to a broader range of healthcare providers, with flexibility and choice compared to Medicare Advantage plans with network restrictions.
- Case Example: Felix’s Story
- Felix, an avid fisherman from Washington, opted for Medigap Plan F.
- Plan F covered all deductibles and coinsurance for Medicare Parts A and B.
- During a heart attack and subsequent medical care, Felix had no out-of-pocket expenses.
- This comprehensive coverage allowed Felix to focus on recovery without the stress of medical bills.
- Medigap plans offer essential benefits by covering out-of-pocket costs, providing financial security, and allowing access to a broad range of healthcare providers.
- They supplement Original Medicare, filling gaps left by Parts A and B.
- Understanding eligibility, enrollment periods, and comprehensive coverage advantages like Plan F ensures peace of mind for beneficiaries.
- Choosing the right Medigap plan helps manage healthcare expenses effectively and provides the freedom to choose the best healthcare providers.
