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A Quick Medigap Overview

When you have the Original Medicare Plan coverage, you will find it does not provide 100% coverage. You will be required to pay deductibles, co-pays, and co-insurance. While Medicare pays for a lot of health care services, there are still many it does not cover. Medigap was designed to help pay the costs that Medicare does not cover.

What is Medigap?

Medigap is health care insurance provided by private insurance companies to cover the gaps in the Original Medicare Plan. Both plans will pay their shares of health care costs to your health care provider. Medigap policies must have specific benefits, and insurance companies are only allowed to sell standardized Medigap policies.

Medigap Eligibility Requirements

Medigap coverage only works in conjunction with the Original Medicare Plan. Typically, you must have Medicare Part A and Part B. If you and your spouse want Medigap coverage, you must each purchase separate policies. Medigap policies will only cover one person per policy.

If you enroll in a Medicare Advantage Plan, your Medigap coverage will not work. You may wish to (although legally you don’t have to) cancel your Medigap policy if you choose a plan aside from the Original Medicare Plan.

Available Medigap Plans

Federal and state laws regulate Medigap policies. These laws are put in place to protect you as a beneficiary. Medigap policies have to be clearly labeled as “Medicare Supplement Insurance.” In some states, you may be able to choose from up to 12 different standardized policies (Medigap Plans A through L).

Each plan offers a different set of basic and additional benefits and is the same for every insurance company. Because benefits are the same for every insurance company, you do not want to overpay. Insurance companies set their own prices and decide which policies they want to sell.

Medigap policies no longer cover prescription drugs. If you have a Medicare Prescription Drug Plan (Part D) and a Medigap policy that covers drugs, then you need to tell your Medigap insurance provider to remove the drug coverage from your policy. You may choose to keep the Medigap policy with prescription drug coverage; however, you cannot have both. Medigap drug coverage is not as beneficial as Part D coverage.

Plans A through J

Plans A through J have more benefits, higher premiums, and lower out-of-pocket expenses. Basic benefits include Medicare Part A and B co-pay or co-insurance, and three pints of blood. Extra benefits may include Skilled Nursing Facility co-insurance, Medicare Part A and B deductibles, Medicare Part B excess charges, foreign travel emergency services, at-home recovery, preventive care, and some may still cover prescription drugs.

Plans K through L

Plans K through L have lower premiums and higher out-of-pocket expenses. Basic benefits include Medicare Part A hospital benefits, Medical Part A and B co-insurance or co-pay, blood, and hospice care. Extra benefits include Skilled Nursing Facility co-insurance and Medicare Part A deductibles.

Remember, when choosing a Medigap plan, compare each plan and then compare different insurer quotes. You want to make sure you have adequate coverage to meet your needs, but you don’t want to pay more when each plan is the same for every insurance company.