March 29, 2024

“MediGap” Insurance

Posted on June 1, 2016 by in Medicare

If you’re about to turn 65, you may be shopping soon for a health plan that covers the costs that traditional Medicare doesn’t.

As welcome as Medicare’s health care coverage is, it does have its gaps. The traditional fee-for-service program generally pays 80 percent of the medical bills. Which means the remaining 20 percent becomes the responsibility of beneficiaries.MedicareDiagram72

To protect themselves, many people buy supplemental coverage from private insurers. The “Medigap” insurance, as it’s called, helps fill the gaps that deductibles, copayments and coinsurance leave. It makes out-of-pocket costs more manageable.

Not everyone should consider a Medigap policy. You don’t need to supplement your Medicare coverage if you’re on Medicaid or signed up for a private Medicare Advantage plan or enrolled in a group health plan through an employer or former employer.

But about one in four Medicare beneficiaries does purchase a Medigap policy.

The best time to buy one is within six months of turning 65 and enrolling in Medicare’s Part B medical insurance. During that period, insurers can’t refuse to sell you a policy, or charge you more than other people, because of a health problem.

If you try to buy after those six months, there’s no guarantee an insurer will cover you.

To help you understand what you’re buying, the government standardized Medigap benefits years ago and labeled each kind of plan with a letter, from A to N. Today, there are 10 kinds of plans. All insurers selling a particular kind of plan must offer the same package of benefits.

Visit www.medicare.gov and click on “Supplements and Other Insurance” to find out more about each of the 10 available kinds of plans.

All 10 standardized plans cover these basic benefits: the coinsurance for extended hospital stays, the coinsurance for doctor visits and outpatient services, the coinsurance for hospice care, and the cost of the first three pints of any blood you might need.

Beyond that, different Medigap plans cover additional out-of-pocket expenses, such as the hospital deductible, the outpatient deductible, the coinsurance for skilled nursing care, and the cost of medical emergencies while traveling outside the country.

You’ll pay the insurer a monthly premium for your Medigap policy in addition to the monthly premium you’ll pay Medicare for Part B. Although insurers must offer the same benefits within each kind of plan, their premiums can vary widely. So shop around.

It’s also wise to find out how often an insurer has raised premiums. It’s not just the initial price, but what happens year to year. An insurance broker will have that information.

One note of caution: Medigap insurance doesn’t plug all the holes. It’s not a way to pay for long-term custodial care, dental care, eyeglasses or hearing aids. Also, new Medigap policyholders need to buy separate drug coverage under Medicare’s Part D if they want it.

Still, the combination of traditional Medicare coverage and a Medigap plan makes good sense for beneficiaries who prefer a broad choice of doctors, hospitals and other health care providers but still want to limit their out-of-pocket expenses.

If you’re interested in supplemental insurance, here are four steps to follow:

First, decide which benefits you want and which standardized Medigap plan best meets your needs. Visit www.medicare.gov or call 1-800-633-4227 and request a free copy of the Medicare publication “Choosing a Medigap Policy.”

Next, find out which insurers sell Medigap policies in your area. Visit www.medicare.gov for a comparison of supplemental plans. Or call Alabama’s State Health Insurance Assistance Program at 1-800-243-5463 or Alabama’s State Insurance Department at 1-800-433-3966.

Then, do some research on the insurers that interest you. Besides comparing premiums, check the companies’ customer service. The State Insurance Department will have a record of consumer complaints against particular insurers.

Finally, pick the policy that best fits your needs. Contact the insurance company directly, or work with an insurance broker or agent. Once your application has been accepted, you can keep your insurance as long as you pay the premiums.

Bob Moos is the Southwest public affairs officer, U.S. Centers for Medicare and Medicaid Services.

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