Medicare Supplement Insurance

Medicare supplement insurance, also known as Medigap insurance, is insurance coverage designed to fill in the “gaps” in Original Medicare Plan coverage. Medigap policies help pay some of the health care costs that the Original Medicare Plan doesn’t cover, like copayments, coinsurance, and deductibles. If you are in the Original Medicare Plan and have a Medigap policy, then Medicare and your Medigap policy will each pay its share of covered health care costs. Medigap insurance is different from Medicare Advantage because it only supplements the Original Medicare Plan. If you opted for a Medicare Advantage health plan, you cannot also buy a Medigap policy. Although you do have out-of-pocket expenses with Medicare Advantage, they are typically not as great as with Original Medicare.

Generally, when you buy a Medigap policy you must have Medicare Part A and Part B. You will have to pay the monthly Medicare Part B premium ($96.40 in 2011 for most beneficiaries). In addition, you will have to pay a premium to the Medigap insurance company. As long as you pay your premium, your Medigap policy is guaranteed renewable. This means it is automatically renewed each year. Your coverage will continue year after year as long as you pay your premium.

Insurance companies can only sell you a “standardized” Medigap policy. Eleven standard Medigap policies are available in most states. Each lettered plan — A through G and K through N — offers a different set of benefits, filling different gaps in Medicare Parts A and B coverage. All Medigap plans with the same letter provide the same benefits. Only the premiums and the sponsors of the plans vary. Insurance companies that sell Medigap policies don’t have to offer every Medigap plan. However, they must offer Medigap Plan A if they offer any other Medigap policy.

It’s important to compare Medigap policies, because costs can vary. The standardized Medigap policies that insurance companies offer must provide the same benefits. Generally, the only difference between Medigap policies sold by different insurance companies is the cost.

You and your spouse must buy separate Medigap policies. Your Medigap policy won’t cover any health care costs for your spouse.

Generally, standard Medigap policies cover some or all of the cost of:

  • Your Part A deductible and coinsurance (i.e. the 20% that Medicare doesn’t cover) for hospital stays
  • Your portion of your doctor’s bills for Part B services
  • The first three pints of blood annually, if needed
  • Hospice care coinsurance

Medigap plans do not cover:

  • Long-term care to help you bathe, dress, eat or use the bathroom
  • Vision care, eyeglasses, hearing aids or dental care
  • Private-duty nursing
  • Prescription drugs, or any out-of-pocket costs for Part D plans

(AARP Medigap: Your Supplemental Insurance)

 

Sources used:

  1. http://www.medicare.gov/navigation/medicare-basics/medicare-benefits/medicare-benefits-overview.aspx
  2. http://www.medicare.org/
  3. http://www.aarp.org/health/medicare-insurance/
  4. http://www.kff.org/medicare/
  5. http://www.aarp.org/health/medicare-insurance/info-01-2011/understanding_medicare_medigap.html

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