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Medicare is an insurance policy designed for people age 65 and older and others who have a disability. However, Medicare may not cover every medical procedure or piece of medical equipment. When your medical needs fall out of Medicare’s coverage, having a supplemental backup plan can help you pay less out of pocket.
10 Important Facts About Medigap
- You must have Medicare Part A and Part B to qualify for Medigap coverage
- Medigap does not cover everything
- A Medigap policy is not a Medicare Advantage Plan
- You can purchase a Medigap plan from any insurance company that’s qualified to sell them in your state
- A Medigap policy can only cover the policyholder
- Medigap covers you for any hospital or doctor that accepts Medicare
- Medigap plans are standardized
- Each Medigap plan offers different benefits
- Medigap provides guaranteed renewals
- Medigap has a time limit for enrollment
Medicare can provide you with hospital and medical coverage that you might not have after you retire from your job. Medicare insurance grants coverage to seniors for skilled nursing facility stays, hospital visits, home health care, and some outpatient services. However, there are a lot of medical procedures and necessities that Medicare won’t cover, leaving you to foot the bill.
Medigap is one type of medical coverage that you might hear about if you’re on Medicare or close to the age of receiving Medicare. This supplemental coverage is one that people often consider along with Medicare Advantage, another type of supplemental insurance that can fill in the gaps of Medicare.
What is Medigap?
As you near the Social Security retirement age, it’s crucial to plan your medical care and coverage. Medicare is an insurance plan that people age 65 and older are entitled to, but it leaves a lot off the list when it comes to medical coverages. Medigap is a Medicare supplement policy that can bridge the gaps in care that Medicare provides.
Unlike a Medicare plan, Medigap can help you pay for some health care costs, like your physician copays, coinsurances, and Medicare deductibles. Some Medigap policies will also pay for hospital and doctor visits that occur when you travel outside of the United States. You can expect a Medigap policy to pay for most out-of-pocket expenses you have for procedures, doctor visits, and equipment that Medicare covers. Similarly, Medigap won’t pay for most charges that Medicare doesn’t already cover.
10 Important Facts About Medigap
Understanding all you can about your options when it comes to Medicare and Medicare supplemental insurance can help you ensure that you get the right coverage for your medical needs. Here is what you need to know about a Medigap plan before signing up for a policy:
1. You must have Medicare Part A and Part B to qualify for Medigap coverage
There are two primary types of Medicare: Part A and Part B. Medicare Part A is also known as hospital insurance because it covers hospital visits, inpatient stays at a hospital, and other short-term care, like hospice care and stays at skilled nursing facilities. Medicare Part B is medical coverage that insures you for doctors’ visits, preventative services, medical supplies, and outpatient services. The Part A deductible is a separate cost from the Part B deductible.
You aren’t required to have both coverages when you have Medicare, but you can only have Medigap coverage when you do have both. Your coverage for Medigap will only continue if you remain on both Medicare Part A and Part B policies because Medigap helps pay your out-of-pocket costs for services covered under these policies.
2. Medigap does not cover everything
As a Medicare supplemental insurance, Medigap won’t cover all of your out-of-pocket costs. Medigap will not cover anything that original Medicare won’t cover, like vision care, dental care, eyeglasses, hearing aids, and long-term care. Instead, the supplement plan gives you extra coverage for the copayment, coinsurance, deductible, and other out-of-pocket costs you incur from Medicare-covered services.
Medigap also doesn’t include drug coverage. To get prescription drug coverage, you’ll need to choose Medicare Part D, which can reduce what you pay for your prescriptions. Part D comes with an additional monthly premium and different deductible rates than other Medicare plans.
3. A Medigap policy is not a Medicare Advantage Plan
When you reach the age of 65, you may have to decide between Medicare vs Medicaid or working with a private insurance company to meet your needs for healthcare coverage. If you choose traditional Medicare, you might also need to decide if supplemental insurance is right for you. Although some confuse a Medicare Advantage Plan with Medigap, the two are not the same Medicare supplement insurance plan. You also can’t have Medigap when you have a Medicare Advantage Plan.
What is the difference between Medigap and Medicare Advantage? A Medicare Advantage Plan is also known as Medicare Part C. These plans are available from private insurance companies that are approved by Medicare to sell them. You can have coverage for both hospital stays and medical procedures with Medicare Advantage, as the policy will take over the same coverages as Medicare Part A and Part B.
4. You can purchase a Medigap plan from any insurance company that’s qualified to sell them in your state
You can contact insurance companies that you currently use or have in the past to see if they’re qualified Medigap sellers. Many popular insurance companies, like Aetna, Cigna, Anthem, and Mutual of Omaha, sell Medigap policies. The Medigap insurers that are available to you will depend on the state in which you live.
Each company may offer different Medigap plans and premium pricing, so it’s important to contact more than one insurance company to learn what kind of Medigap coverage they provide and their pricing.
5. A Medigap policy can only cover the policyholder
Like Medicare, a Medigap policy covers only Medicare beneficiaries. That means that only the beneficiary – the person eligible for Medicare and the policyholder – can qualify for a Medigap plan. An individual would need to be eligible for Medicare on their own to also qualify for Medigap.
If you have a spouse or dependent that qualifies for Medicare and wants a Medigap policy, you and that person would still need separate Medigap policies.
6. Medigap covers you for any hospital or doctor that accepts Medicare
The point of Medigap is to help you pay for some out-of-pocket costs that you’ll have for the services you receive on Medicare, effectively lowering the price you pay for healthcare. Each beneficiary must have Medicare Part A and Part B to qualify for Medigap because Medicare is the primary payor for each service.
Medigap will, therefore, cover the same hospitals, doctors, and services that you’d receive on your Medicare plan. This can help you have peace of mind when you visit the doctor knowing that your Medigap plan will assist you with the costs of your visit.
7. Medigap plans are standardized
Medigap plans are standardized, meaning that each type of Medigap plan will offer the same primary benefits with any insurance carrier that sells it. A Medigap E plan with one company, for example, will include the same benefits as a Medigap E plan with another insurance company. A few states have their own ways of standardizing these plans, but you can still expect each company to offer similar benefits with each type of plan.
Insurance carriers can, however, vary their prices from one another for the same plan, which is why it’s crucial to compare plans and prices with each company.
8. Each Medigap plan offers different benefits
Medigap plans include A through N, each of which offers different benefits to enrollees. Some plans cover all coinsurance for skilled nursing facilities, while others cover 50% or 75% of coinsurance. A few policies cover up to 80% of medical expenses during foreign travel, while others provide no coverage for it.
You can speak with your physician and your insurance carrier to help you choose the right Medigap plan for you based on the medical services you use or expect to use most and your monthly budget.
9. Medigap provides guaranteed renewals
The aging population rightfully has many concerns over insurance policy denials, cancellations, and non-renewals during the medical underwriting process. Fortunately, an insurance company is not allowed to cancel or deny the renewal of your Medigap policy if your health changes for any reason. The only reason a company can cancel your policy is if you fail to pay your premiums.
10. Medigap has a time limit for enrollment
Like most health insurance plans, Medigap insurance has an open enrollment period for coverage. Generally, once you reach the age of 65 and enroll in Medicare Part B, you have six months to enroll in a Medigap plan.
There may be other times you can enroll, too, like if you lose some health coverage or another Medigap policy you have ended its coverage. However, joining outside of open enrollment may force you to pay higher prices for a Medigap plan.
Insurance Plans That Are Not Medigap
There are several health insurance and supplement insurance plans that people often confuse with Medigap but are, in fact, separate policies with different functions and benefits for the enrollee. These plans include:
- Medicare Advantage Plans: Medicare Advantage Plans cover the services Medicare Part A and Part B cover, unlike Medigap, which pays for out-of-pocket costs associated with those services.
- Medicare: Medicare has a few different plans, but you need to have both Part A and Part B to qualify for Medigap.
- Medicaid: Medicaid is a federally-funded program like Medicare that covers medical costs for people who qualify based on income and/or disability.
- TRICARE: TRICARE covers members of the United States Military, including retirees and their families.
- Veterans’ benefits: Veterans of the Armed Forces may receive low or no-cost healthcare through the Department of Veterans Affairs.
- Employer health insurance plans: Employers that offer health insurance plans help to fund the plan for each enrollee.
- Other private insurance policies: Although Medigap is obtainable through a private insurance company, it is different from other private insurance policies that you can enroll in without being on Medicare.
Important Facts About Medigap
Medigap is a form of supplemental coverage that can assist you with the costs of an original Medicare plan. Some Medigap plans will pay all your copays and coinsurance for skilled nursing facilities, hospital visits, and hospice care, significantly decreasing what you’d pay out of pocket for these services.
Medigap does come with some caveats, too, like only being offered to people who pay for both Medicare Part A and Part B and not covering prescription drugs. It’s necessary to consider all your options when it comes to Medicare, Medigap, and the medical services they provide to decide what combination of coverage will work best for you.