As individuals reach the age of 65, they become eligible for Medicare, the Federal health insurance program that provides coverage for hospitalization, medical services, and prescription drugs. However, Medicare coverage is not comprehensive, and individuals may face out-of-pocket expenses such as deductibles, copays, and coinsurance. This is where Medigap (Medicare Supplement plan) comes in as a supplemental insurance plan that helps fill the gaps in Medicare coverage.
What is Medigap?
Medigap, also known as Medicare Supplement Insurance, is a private insurance policy that covers some or all of the out-of-pocket costs that are not covered by Original Medicare, such as copayments, deductibles, and coinsurance. Medigap policies are sold by private insurance companies and are designed to work in tandem with Medicare coverage.
Medigap policies are standardized and are identified by letters A through N. Each policy letter provides a different level of coverage, with Plan A offering the least amount of coverage and Plan F offering the most. As of 2020, Plans C and F are no longer available to newly eligible Medicare beneficiaries. However, individuals who enrolled in these plans before 2020 can still keep them.
What does Medigap cover?
Medigap policies are designed to cover the gaps in Medicare coverage, and the exact coverage varies depending on the plan. Here are some of the common benefits that are covered by most Medigap policies:
- Part A coinsurance and hospital costs: Medicare Part A covers hospitalization, but beneficiaries are responsible for a deductible and coinsurance. Medigap policies can cover some or all of these costs.
- Part B coinsurance or copayment: Medicare Part B covers medical services, but beneficiaries are responsible for a deductible and coinsurance. Medigap policies can cover some or all of these costs.
- Part A hospice care coinsurance or copayment: Medicare Part A covers hospice care, but beneficiaries are responsible for a coinsurance or copayment. Medigap policies can cover some or all of these costs.
- Skilled nursing facility care coinsurance: Medicare covers skilled nursing facility care, but only for a limited time. Medigap policies can cover some or all of the coinsurance for extended care.
- Part A deductible: Medicare Part A requires a deductible for hospitalization. Medigap policies can cover some or all of this cost.
- Part B deductible: Medicare Part B requires a deductible for medical services. Medigap policies can cover some or all of this cost.
- Part B excess charges: Medicare providers may charge more than the Medicare-approved amount for medical services. Medigap policies can cover some or all of these charges.
- Foreign travel emergency: Medicare does not cover medical expenses incurred while traveling outside of the United States. Medigap policies can cover some of these costs.
How does Medigap work with Medicare?
Medigap policies work alongside Original Medicare. Beneficiaries are still enrolled in Medicare and pay their Part B premium. In addition, they pay a separate premium for their Medigap policy to the private insurance company.
When a beneficiary receives medical services, Medicare pays its share of the approved amount directly to the healthcare provider. The Medigap policy then pays its share of the remaining costs, depending on the coverage of the specific policy.
It is important to note that Medigap policies only work with Original Medicare. They cannot be used with Medicare Advantage plans, which are private insurance plans that offer a substitute or alternative to Original Medicare that contains more risks, restrictions and limitations.
Why do you need a Medigap plan? Read about this next: 7 Benefits of Having a Medicare Supplement Plan
By David Lasman – “Ask Medicare Dave” | President – Senior Healthcare Team
wwww.SeniorHealthcareTeam.com | 866-333-7340 Selecting the right healthcare plan through Medicare can be overwhelming and downright stressful. Senior Healthcare Team is a nationwide resource that provides guidance and support about Medicare to seniors at no cost to them and helps them to choose the most suitable insurance plan tailored to their specific needs and budget. Our goal is to educate and empower our clients to make the best decisions regarding their healthcare and clear up the confusion of Medicare. At Senior Healthcare Team, we aren’t partial to any one insurance company. Our loyalty is to our clients and our mission is to provide them with the best healthcare options at the very lowest cost.