Most senior citizens in the United States age 65 or older have Medicare as their primary and only healthcare insurance. But unfortunately for our seniors who are often on a fixed income, Medicare alone doesn't carry all healthcare expenses. Medigap plans, also known as Medicare supplement insurance plans, are designed to cover the “gaps” in coverage in Original Medicare. Original Medicare is comprised of Medicare Parts A and B, both of which are administered by the federal government. Medigap is provided by private insurers. In order to decide if you need Medigap insurance it is important to first understand the Medicare gaps.
Medicare Coverage Gaps Medicare Parts A and B, also known as Original Medicare, provide benefits for inpatient and out-patient care including: hospital stays, some follow-up care in skilled nursing facilities, doctor’s office visits and more. Original Medicare however does not generally cover things like eye care, hearing, custodial care or prescription drugs. Medigap Coverage Medigap, or Medicare supplement insurance plans, cover some or all of the expenses that Medicare Parts A and B do not pay.
In most states, there are 10 standard Medigap plans from which to choose if you don't qualify for Medicaid. It is important to compare the coverage and prices from various providers to ensure you make the best decision. Medigap plans provide a wide range of benefits. Depending on the Medigap plan you select here are some of the things your plan may cover.
· Part A Deductible
· Part B Annual Deductible
· Hospital and skilled nursing coinsurance
· Part B Coinsurance or co-pays
· Blood Transfusions (first 3 pints)
· Cost of extra 365 hospital days after using up Part A benefits
· Preventative care coinsurance costs
· Foreign travel emergency medical benefits (up to plan limits)
The 10 Medigap Plans In most states, there are 10 different Medigap plans from which you can choose, and each provides a varying degree of gap coverage at a number of different price points. Visit the Medicare website or contact your State Health Insurance Assistance Program (SHIP) to find out what plans are available in your area. The best way to identify which Medicare coverage gaps will affect you most is to make a list of all of the medical expenses and procedures you have faced in the past 1-3 years.
You can then review Medicare Parts A and B coverage to help determine what out-of-pocket costs you would have faced had you been enrolled in Medicare at the time. If you would have faced several out-of-pocket expenses, purchasing a Medigap plan could be a good investment.
1. Medigap policies are only available to individuals who already have Medicare Part A for free hospital services and Medicare Part B for doctor services. Each plan covers one only individual, meaning you and your spouse will have to purchase separate Medigap policies.
2. Medigap has 12 standard plans, through A to L, that offer different levels of health coverage and benefits. Although different insurance companies sell these policies, they offer the same Medigap plan benefits. Not all Medigap policies may be available in your state, so check with your state websites or providers.
3. If you intend buy a Medigap plan, you must do it within the Medigap open six-month enrollment period that starts on the first day of the month in which you turn 65 and enroll in Medicare Part B. During this period, insurance companies cannot use medical underwriting to deny you Medigap policy, or raise your premiums due to your health or apply waiting periods, unless you suffer from pre-existing medical conditions. However, if you try to buy a Medigap policy after the six month enrollment period is over, there is no guarantee that you'll be able to get coverage. In case you get covered, chances are that your rates may climb substantially.
4. For a Medigap plan, you have to pay a monthly premium to the insurance company along with your Medicare Part B premium. The cost of the Medigap policy is determined as follows:
a. Community-rated policies charge the same premium to everyone living in that area regardless of age.
b. Premiums in Issue-age-rated policies are based on your age when you first bought the policy, however, the rate doesn't increase automatically as you age.
c. Attained-age-rated policies are inexpensive at the age of 65, but their rates increase automatically as you age. Generally, insurance companies establish their own prices and eligibility regulations, so it is recommended to shop around for the plan.
5. Medigap plans cover some of your Medicare co-payments, co-insurance for hospital stays, and some other medical services such as preventive care, at home recovery, etc., thus reducing your out of pocket costs. It is important to note that Medigap plans do not cover eyeglasses, hearing aids, dental care, long term care etc. Prescription drug coverage can be obtained by enrolling into the Medicare Prescription Drug Plan, or Part D.
You have to decide what type of healthcare coverage policy plan is best for you. In most cases, if you give up your Medigap policy, you won't be able to get it back. If you are on Medicaid, you may receive little to now bills but your treatments will probably be limited and your assets exhausted.
Medicare Supplement Insurance has an automated claims process since it is linked to the Medicare B. Make sure that the insurance company has arranged with Medicare to file your Medigap claims automatically. Once you are done with comparing the Medigap premiums and looked into the financial stability of the insurance companies, take your time to decide which type of Medicap plan can help you protect yours and your spouse’s health.
