As noted in a previous Cantissimo Senior Living blog post, Getting Started with Medicare, Original Medicare consists of Part A and Part B. This blog post...
Original Medicare (Part A and Part B) offers many benefits, but it has some "gaps." The most prominent gap is there is no limit on out-of-pocket expenses, which encompass deductibles, copayments, and coinsurance.
One way to fill many of these gaps is through a Medicare Supplement Insurance policy (also known as Medigap) sold by private insurers. Medigap policies come in several different versions but must adhere to strict government standards. These standards allow easier comparisons between policies and protect consumers from unscrupulous insurers.
The main benefit of Medigap policies is "capping" out-of-pocket expenses for approved Medicare services. However, there are several other benefits that a Medigap policy may pay for all or part:
|Benefits||Plan C Coverage||Plan G Coverage|
|Part A coinsurance and hospital costs||100%||100%|
|Medicare Part B coinsurance/copayment||100%||100%|
|Blood (first 3 pints)||100%||100%|
|Part A hospice care coinsurance/copayment||100%||100%|
|Skilled nursing facility care coinsurance||100%||100%|
|Part A deductible||100%||100%|
|Part B deductible||100%|
|Part b excess charges||100%|
|Foreign travel emergency care||80%||80%|
While the above plans differ slightly, there would likely be price differences between plan types and companies offering the policies. Also, the states of Massachusetts, Minnesota, and Wisconsin classify Medigap policies differently. More complete descriptions and comparisons of plan types can be found in the Medicare publication Choosing a Medigap Policy: A Guide to Health Insurance for People with Medicare.
With Original Medicare and a supplemental Medigap policy, Medicare will first pay its share of covered costs. Then, the Medigap policy pays all or part of any remaining cost. The percent of the remaining cost paid depends on the type of policy purchased.
Medigap can only be purchased to supplement Original Medicare. Medicare beneficiaries who have Medicare Advantage or Medicaid cannot also have Medigap coverage.
Here's a four-step process for buying a Medigap policy. The purchase must occur during the Medigap Open Enrollment Period, which covers the six months beginning when a person turns 65 and is enrolled in Part B. Medigap coverage may not be available for purchase outside this period. Still, if it is, it may cost more.
Some people don't sign up for Part B at age 65 because they are still covered by company or union healthcare insurance. In this case, their six-month Medigap Open Enrollment Period begins when they eventually enroll in Part B.
Note that a Medigap policyholder may pay the following separate monthly costs for Medicare:
To learn more, download our complimentary eBook, "Navigating Medicare: Simple Idea, Complex Reality"!