Posts Tagged ‘medigap’

Medicare Supplement Insurance

Friday, February 24th, 2012

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)


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Introducing Medigap Plans M and N

Wednesday, May 12th, 2010

Since 1992, Medicare Supplement plans, better known as Medigap, have offered pretty much the same coverage, with the same letter code from A to L.  But new laws have led to new standards, and effective June 1, 2010, two new Medigap plans shall be making their debut in the insurance market.  Here we see how these particular Medigap plans work, how Medigap Plan M and Medigap Plan N differ, and in general, what’s in it for you should you be wanting to enroll to either plan once effective.

Before going into further detail on the plans itself, we might as well discuss what this means to new subscribers or existing subscribers.  New subscribers, preferably those who had just recently turned 65 as of June 1, 2010, would be saving money compared to current Medigap plans.  Existing subscribers, particularly those who used to be on the Medicare Advantage program, may not be saving that much, but would nonetheless be able to save some money as Medicare Advantage premiums are expected to go up once the upcoming changes take effect. 

Medigap Plan M is notable for its cost-sharing feature, which would certainly help reduce your monthly premiums.  With the lower monthly premiums in place, those subscribed to Medigap Plan M would split the Medicare Part A deductible of $1068 (as of last year) with the insurance company at an even 50-50.  While the Medicare Part B deductible is not covered at all in Plan M, Medigap Plan M would eliminate doctor’s office co-pays after you meet the required Part B deductible.  Most current Medigap subscribers are under Plan F, and many believe Plan M would allow consumers to save around 15% by choosing this particular plan.

Like Plan M, Medigap Plan N also utilizes cost-sharing, but unlike Plan M, Medigap Plan N is more geared towards using co-pays to reduce premium costs.  The co-pay system set to take effect with Medigap Plan N is as follows –  $20 for doctor’s visits and $50 for emergency room visits.  Just like Medigap Plan M, meeting the required Medicare Part B deductible is a prerequisite.  It is only then when the co-pay system would take effect.  Again, this spells a projected saving when compared to the usual Medigap Plan F currently on the market.

After analyzing both plans, there are definitely some very distinct and useful advantages if you’re considering either Medigap Plan M or Medigap Plan N.  While these plans may have been introduced at the “expense” of a few existing plans, the bottom line is not just savings and added coverage, but also simplicity, having less Medigap plans to choose from come the 1st of June.  But whether you’re on an existing Medicare Supplement plan, about to go on one of these plans, or currently on Medicare Advantage, Medigap Plans M and N are both very worthy options to consider when the time comes around.

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