If you recently enrolled in an Original Medicare Plan (Plan A and Plan B), you may be familiar with Medigap. So, what is a Medigap Plan?
The purpose of Medigap plans is to assist you in partially covering the out-of-pocket expenses related to your Medicare plan. There are various Medigap policy options available, so it’s important to conduct due diligence and choose a plan that meets both your financial and medicare requirements. To help you better understand supplemental Medicare insurance, we’ll discuss how it works, the coverage, costs, and the difference between the Medigap Plan and Medicare Advantage.
Medigap Plan Overview
Medigap, also known as Medicare Supplement Insurance, is a type of private health insurance designed to help cover the “gaps” or out-of-pocket costs that Original Medicare (Part A and Part B) doesn’t pay. These out-of-pocket costs can include deductibles, copayments, and coinsurance.
Here’s an overview of Medigap, including coverage, costs, and benefits:
- Coverage — Medigap plans are standardized and identified by letters (A, B, C, D, F, G, K, L, M, and N). Each plan offers a different set of benefits, but all plans of the same letter must provide the same coverage, regardless of the insurance company offering them.
- Costs —- The cost of Medigap plans can vary based on several factors, including the plan type, the insurance company, location, age, and health status. Premiums are paid in addition to the premiums for Medicare Part B. It’s important to note that Medigap plans do not cover prescription drugs, so beneficiaries often need to enroll in a separate Medicare Part D plan for prescription drug coverage.
- Guaranteed Issue Period —- The best time to buy a Medigap policy is during the open enrollment period, which is a six-month period that starts the first month you’re both 65 or older and enrolled in Medicare Part B. During this time, you have a guaranteed right to buy any Medigap policy sold in your state, regardless of your health status. This means that insurers cannot deny you coverage or charge you more based on pre-existing conditions.
- Benefits —- Medigap plans are standardized by the federal government, meaning each plan type (e.g., Plan A, Plan B) offers the same basic benefits across different insurance companies. This makes it easier to compare plans. As long as you pay your premiums, the insurance company is generally not allowed to cancel your Medigap policy, regardless of changes in your health.
How Does a Medigap Plan Work?
To get a Medigap policy, you need to have Medicare Parts A and B. Any insurance company with a sales license in your state may offer you a Medigap plan. Each plan provides different coverage so that you may choose the appropriate Medigap plan for your needs.
A 65-year-old woman in Wichita, KS, who does not smoke may spend $33 per month for a high-deductible Plan G coverage as opposed to $445 for a standard Plan G. A 65-year-old guy in Miami, Florida, who does not smoke, may pay $65 per month for a Plan K policy or $262 for a Plan D.
Medigap plans come with monthly premiums in addition to the premiums you pay for Medicare Part B. The cost can vary widely based on factors such as your age, location, the insurance company, and the specific plan you choose.
Medicare Advantage vs. Medigap (Medicare Supplement)
An alternative to the government-run Medicare program is a private Medicare Advantage Plan, often known as Medicare Part C. A predetermined network of physicians and hospitals makes up the majority of these plans, which are configured as health maintenance organizations (HMOs) that include other services, including preventative health care, in addition to replacing all of Original Medicare’s offerings.
If your doctor or the facility where you get your treatment takes Medicare, a Medigap plan will likely provide you greater flexibility than Medicare Advantage. For individuals who travel frequently or own properties in multiple locations, this is a more advantageous choice.
| Medigap Plans | Medicare Advantage Plans | |
Premium Costs | Higher premiums $44 – 392 per month (estimated) | Lower premiums $0 – 295 per month (estimated) |
Where You Can Get the Plan | Works in any state | Works only in your state, by region |
Provider Network | Don’t need a provider network (unless you buy a Medigap Select plan) | Must use a provider network |
Prescription Drugs Coverage (Part D) | Medicare Part D not included | Medicare Part D usually included |
Who Is Eligible for Medigap?
It’s crucial to understand that Medigap plans are sold by private insurance companies, and each state can have its own rules and regulations regarding Medigap eligibility and coverage. Before purchasing a Medigap policy, it’s advisable to carefully review the available plans, and compare coverage and costs, and consider your specific healthcare needs. Consulting with a licensed insurance broker can provide personalized guidance based on your situation.
- Enrollment in Medicare Part B —- To be eligible for a Medigap policy, you must be enrolled in both Medicare Part A and Medicare Part B. Part A covers hospital services, while Part B covers medical services such as doctor visits and outpatient care.
- Open Enrollment Period (OEP) —- The best time to enroll in a Medigap policy is during the Medigap Open Enrollment Period. This period begins the first month you’re both 65 or older and enrolled in Medicare Part B. It lasts for six months. Insurance companies must sell any available Medigap policy in your state without denial or increased charges based on pre-existing conditions.
- Guaranteed Issue Rights —- In addition, you may have guaranteed issue rights which allow you to buy a Medigap policy outside the OEP without the risk of being denied coverage or charged more. For example, if you lose other health coverage or move out of your plan’s service area, you may have a guaranteed issue right.
- State Regulations —- While federal regulations provide a basic framework for Medigap eligibility, states may have additional rules and regulations. Some states have additional open enrollment periods or other protections for beneficiaries.
Frequently Asked Questions
What Do Medigap Plans Cost?
Medigap plan costs vary by location, insurer, and plan type. Premiums are typically in addition to Medicare Part B premiums. Factors like age, health, and plan coverage influence costs.
Is There Anything Medigap Doesn’t Cover?
Medigap doesn’t cover long-term care, vision or dental care, hearing aids, eyeglasses, or private-duty nursing. It also doesn’t include prescription drug coverage; beneficiaries need a separate Part D plan for that.
Is My Spouse Covered by Medigap?
Medigap plans are individual, so each spouse needs their own policy. They must enroll individually during the Open Enrollment Period or qualify for a Special Enrollment Period.
Does Medigap cover you when you travel?
Some Medigap plans offer coverage for foreign travel emergencies, but there may be limits. It’s crucial to check the specific plan details, as coverage can vary among different Medigap policies.
Conclusion
Medicare Supplement plan can help you keep your medical expenses under control if you have one or more chronic illnesses. Additionally, Medicare Supplement plans are “guaranteed renewable,” which means that as long as you pay your premiums, your Medigap coverage will remain in effect.
If you have any concerns about your health care insurance, contact AHG Brokers to help you make smart investment decisions.