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Medigap Insurance (also referred to as Medicare Supplement) includes a set of plans offered by private companies to fill in the gaps in the Original Medicare Plan, namely, to cover the costs for hospital and doctor services that Original Medicare does not cover.
Providing supplementary options, Medigap policies become effective only in conjunction with the Original Medicare Plan. Medigap policies thus give their beneficiaries tools to make a transition between the potentially required benefits and the benefits available under Original Medicare. The focal points you should consider when making your choice are your own needs, the cost of the premiums and the opportunity to switch to another plan of the same design if necessary. It is important to compare the policies to make sure that the benefits are worth the cost and that you will be able to afford the cost of the premiums in the future.
The acknowledged advantage of Medigap Insurance Plans is that they pay your Medicare's deductibles and cover your co-payments as well as surplus costs if you apply to a doctor outside the comprehensive network of providers working under the contract with Medicare. Other notable advantages of Medigap policies comprise the opportunity to adjust your Medigap plan to your needs within a month each year following your birthday and the alternative to switch to a Medigap plan in case another insurance plan (usually a Medicare Advantage Plan) terminates its coverage in the area.
There are 12 specific benefit plans which are lawfully acknowledged as Medigap policies. The policies are standardized and offered in a system labeled Plan A through Plan L. It must be stated that some companies providing Medigap Insurance coverage may not offer all of the plans, A through L. Each company decides which Medigap policies it will offer to the customers. However, there is always a benefit package, known as the "core benefits" plan that you can purchase at any office selling Medigap policies throughout the country.
All the Medigap policies were standardized in 1992. Some senior citizens are likely to have old, non-standardized policies. In this case they may keep their old plan or consider switching to a new one. The latter option requires an individual to drop the old policy as a Medigap recipient is allowed to sign up only for one Medigap policy by choice.
Plan A incorporates merely the "core benefits". As for the other 11 plans within Medigap, besides the "core benefits", they also offer one or more additional benefits.
The "core benefits" offered by all Medigap plans include covering the fees you would be charged for your reserved days in hospital (Part A hospital coinsurance for 61-90 days), the days of hospital care after your Medicare Part A benefits are no longer valid, the 20% coinsurance under Part B (Medical Insurance) and your first three pints of blood. It should be noted that the last two benefits are not fully covered by Plans K and L which reimburse only a percentage of these costs until your yearly limit is reached.
Additional benefits added to the "core benefits" are offered in Plans B through L and include skilled nursing facility coinsurance, Part A hospital deductible, Part B deductible, charges above the Medicare approved amount, foreign travel emergency coverage, home health aid services and preventive medical care.
Certain services remain outside Medigap coverage, among which are vision and dental care, hearing aids, private duty-nursing and long-term care.
Premiums for Medigap policies can be expensive. What is more, the company may increase the premium for your Medigap policy. You should also bear in mind that your premium is likely to increase in case you have disabilities. Therefore you are recommended to compare different options before you make your final choice. Your insurance plan should not set you back financially. There can be a great difference in price from policy to policy and from company to company.
Earlier some Medigap policies used to offer prescription drug coverage, but after 2006 they do not offer this benefit to new enrollees. If you signed up for a plan with drug coverage when it was available (Plans H, I or J), you can keep it unless you enroll in Medicare Part D. And you may not keep your Medigap policy with prescription drug coverage and at the same time sign up for Medicare Prescription Drug Coverage. Thus, to cover drug costs you have to make an option of enrolling either in a Stand-alone Drug Plan or a Medicare Drug Plan. If you enroll in a Medicare Prescription Drug Coverage Plan, it is advisable to contact the insurance company providing your Medigap policy to adjust your premium correspondingly.
You should know that under certain conditions Medigap policies may turn out to be redundant. It is crucially important to carefully examine the available options. If you are in any of the Medicare Advantage Plans, you do not need Medigap coverage as the benefits duplicate each other. A Medigap plan is also redundant if you are a full Medi-Cal recipient. Medicaid recipients as well as people who are eligible for coverage under the Qualified Medicare Beneficiary Program (QMB) or the Specified Low-Income Medicare Beneficiary Program (SLMB) do not need Medigap policies as their insurance policies usually cover their health care costs. They still may apply for Medigap, if they want to, but it will incur extra costs. As practice shows, Original Medicare beneficiaries generally do not sign up for Medicaid or QMB, and the real choice for Medicare beneficiaries is usually limited by Medicare Advantage Plans and Medigap Plans.
Remember that if you had a prior coverage (for example, another Medigap policy or any of the Medicare Advantage plans), you may have to be exposed to the waiting period for coverage of a pre-existing condition. However, no pre-existing condition exclusion will be imposed on you if you had a prior coverage for at least 6 months before your initial Medicare enrollment period.
If you are considering a Medigap policy as a supplementary option to extend your coverage provided by Original Medicare, you should also be aware of the restrictions imposed on some groups of citizens who do not qualify for Medigap Insurance. Thus, you are not allowed to use your spouse's Medigap Plan, so you must purchase separate policies. Individuals with the end-stage renal disease are not eligible for Medigap policies either.
On purchasing a Medigap policy, you may find your policy inappropriate and change your mind. In this case you are allowed to cancel your policy within 30 days. You will receive a refund of the previously paid premium.
If you have chosen a Medigap policy as an additional option to provide yourself with the benefits you might need, it is recommended to apply for it before the Medicare initial enrollment period begins. It will ensure that your Medigap coverage will go into effect simultaneously with Medicare.