Medigap Insurance Policies

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If you're eligible to participate in Medicare, then you should consider buying Medicare supplemental insurance. These are also known as Medigap insurance policies. Medigap is a health insurance program that picks up costs where Medicare leaves off. If you've already extended your Medicare policy into an HMO plan, then you really don't need an additional policy such as Medigap.

Comparing Medigap Policies

All Medigap insurance policies are sold to individuals through private insurance companies. To make comparisons between companies easier, the different types of Medigap policies have been standardized to offer various levels of insurance coverage. These policies are named Medigap Plan A through Medigap P. Generally, as you get higher in the alphabet, the amount of insurance coverage increases.

Medicare SELECT

Additional Resources

There are exceptions to this rule, and one important exception is the Medicare SELECT policy. This plan can cost less than the standard policies mentioned above, but the plan works more like a health maintenance organization in that there is a network of doctors and hospitals. Not every state sponsors a Medicare SELECT program.

The nice thing about the standardized Medigap policies is that the coverage is also standardized across the United States. Massachusetts, Minnesota, and Wisconsin are the only exceptions to this rule. That means as you move around the U.S., you don't need to worry about understanding differences from state-to-state.

Medigap Coverage and Costs

As mentioned earlier, each lettered plan offers the same exact coverage with increasing benefits as you move up the alphabet. For example, medical coverage will be greater with a Medigap J policy than a Medigap A policy. The Medigap J policy will fill in more coverage gaps, offer lower deductibles, and the premiums will be higher than a Medigap A policy within the same insurance company.

Keep in mind that Medigap is offered through private insurance companies, so it makes sense that within a certain company a Medigap C policy will cost more than a Medigap A policy. However, this is not to say that an insurance company could offer you a Medigap C policy at the cost of a Medigap A policy at another company. It still pays to shop around to find the best premiums for each type of plan.

We're going to finish up by making some generalizations about the different levels of coverage you can expect with each Medigap plan. You still need to study all the benefits outlined in the plans you are considering. This way, you are sure they provide you with the best value for your dollar, while keeping your individual health care needs in mind.

Coverage Not Provided Under Medigap

We'll start by outlining the medical and health care benefits that none of the Medigap plans will cover including:

Hearing aids, vision, and dental benefits.
Private Nurses or other providers of long-term care that provide services such as bathing, dressing, and feeding.

Coverage Provided by All Medigap Policies

The following is a list of the basic benefits that all Medigap plans offer:

Medicare Part A - all plans cover the costs for days 61 through 150 of any hospital stay in a benefit period. Once you've used all of your 150 days of Medicare hospital benefits, all Medigap plans provide for 365 more days over your lifetime.
Medicare Part B - all Medigap policies cover the copayments (20% for doctor services and 50% of mental health services) that are considered reasonable payments for medical services.
Blood - all Medigap plans cover the first three pints of blood you might need each year that are not covered under Medicare (which pick up the pints beyond three).

Additional Benefits of Medigap Plans

Beyond the basics that all Medigap plans cover, there are additional medical benefits offered in Plans B through J. For higher premiums, you can get the following types of medical benefits:

Medicare Part A - Medigap Plans B through J cover the hospital deductible in each benefit period.
Medicare Part B - Medigap Plans C, F, and J pay the deductible each year for doctor fees and other medical services. Medigap Plans F, I, and J pay 100% of the excess charges that occur when a doctor doesn't "accept assignment." Medigap Plan G pays 80% of these excess charges.
At-Home Care - Medigap Plans D, G, I, and J help cover some costs of services such as bathing and dressing, if you're already receiving skilled home health care that is covered by Medicare.
Skilled Nursing Home Care - Medicare pays for skilled nursing home costs for the first 20 days of a benefit period. Medigap Plans C through J pays your share of the bill for day 21 through day 100.
Preventative Care - Medigap Plans E and J offer preventative care benefits such as routine physicals.
Travel Care - Medicare normally does not cover any health care services you might receive while traveling outside the United States. Medigap Plans C through J will cover some emergency health care costs outside the United States.

Medigap Changes in 2010

There were some significant changes to the Medigap program in 2010. Some of the more significant changes include:

Legacy Plans - Plans E, H, I, and J are no longer available after May 31, 2010. If you purchased one of these plans before June 1, 2010, you can keep that plan.
Modified Benefits - Plans D and G purchased after June 1, 2010 will have slightly different benefits than those sold before that date. If you purchased one of these plans before June 1, 2010, you can keep that plan and the benefits will remain the same.
New Plans - Plans M and N are now available and offer additional choices to Medicare recipients.
Basic Benefit - Hospice Part A coinsurance will be covered as part of the basic benefit starting with policies effective June 1, 2010. Plan K will cover 50% of these costs, while Plan L will cover 75%.
Part B Coinsurance - premiums will be reduced in Plans K, L, and N since they will now require you to pay a portion of Part B coinsurance and copayments. All other Medigap plans pay 100% of Part B coinsurance and copayments.

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