Medigap Policies – Definition & Detailed Explanation – Elderly Legal and Financial Planning Glossary

What are Medigap Policies?

Medigap Policies, also known as Medicare Supplement Insurance, are private health insurance plans that help cover some of the costs that Original Medicare (Part A and Part B) does not cover. These policies are sold by private insurance companies and are designed to fill in the “gaps” in Medicare coverage, hence the name “Medigap.”

How do Medigap Policies work?

Medigap Policies work alongside Original Medicare to help pay for healthcare costs such as copayments, coinsurance, and deductibles. When you have a Medigap Policy, Medicare will pay its share of the Medicare-approved amount for covered healthcare services, and then your Medigap Policy will pay its share.

It’s important to note that Medigap Policies only work with Original Medicare and cannot be used with Medicare Advantage Plans, which are private health plans that provide Medicare benefits.

Who is eligible for Medigap Policies?

In order to be eligible for a Medigap Policy, you must be enrolled in Medicare Part A and Part B. You must also be at least 65 years old, although some states may offer Medigap Policies to individuals under 65 who qualify for Medicare due to a disability or certain medical conditions.

It’s important to enroll in a Medigap Policy during your Medigap Open Enrollment Period, which is a six-month period that begins on the first day of the month in which you are both 65 or older and enrolled in Medicare Part B. During this time, you have guaranteed issue rights, meaning that insurance companies cannot deny you coverage or charge you higher premiums based on your health status.

What do Medigap Policies cover?

Medigap Policies typically cover a range of healthcare costs that Original Medicare does not cover, including:

– Medicare Part A coinsurance and hospital costs
– Medicare Part B coinsurance or copayments
– Blood transfusions
– Hospice care coinsurance or copayments
– Skilled nursing facility care coinsurance
– Medicare Part A deductible
– Medicare Part B deductible
– Foreign travel emergency coverage

It’s important to note that Medigap Policies do not cover services that are not covered by Medicare, such as long-term care, dental care, vision care, hearing aids, or eyeglasses.

How to choose the right Medigap Policy?

When choosing a Medigap Policy, it’s important to consider your healthcare needs, budget, and personal preferences. There are several different types of Medigap Policies, labeled with letters (A, B, C, D, F, G, K, L, M, and N), each offering different levels of coverage.

To choose the right Medigap Policy for you, consider factors such as the monthly premium, coverage options, out-of-pocket costs, and the financial stability and reputation of the insurance company. It’s also important to compare prices and benefits from different insurance companies to find the best policy for your needs.

What are the costs associated with Medigap Policies?

The costs associated with Medigap Policies can vary depending on the insurance company, the type of policy, your age, and where you live. Some of the costs you may incur with a Medigap Policy include:

– Monthly premium: This is the amount you pay each month for your Medigap Policy. Premiums can vary widely depending on the type of policy and the insurance company.
– Deductibles: Some Medigap Policies have deductibles that you must meet before the policy starts paying for covered services.
– Copayments and coinsurance: Depending on the policy, you may have to pay copayments or coinsurance for certain healthcare services.
– Out-of-pocket costs: Some Medigap Policies have out-of-pocket limits, meaning that once you reach a certain amount in out-of-pocket costs, the policy will cover 100% of covered services.

It’s important to carefully review the costs associated with different Medigap Policies and choose one that fits your budget and healthcare needs.