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Medigap policies fill in the coverage gaps
Original Medicare (Parts A and B) pays for many of your health care services and supplies, but it doesn't pay for everything. That's why you may want to consider getting a Medigap policy, also called Medicare Supplemental Insurance. A Medigap policy is health insurance sold by private insurance companies and regulated by Medicare. Medigap policies help pay some of the costs that Original Medicare doesn't cover, such as copayments, coinsurance, and yearly deductibles. Some Medigap policies also help pay for services that Original Medicare doesn't cover at all. Basically, a Medigap policy fills the "gaps" in Original Medicare coverage.
How do Medigap policies work with Medicare?
Medigap policies supplement your Original Medicare benefits, which is why these policies are also called Medicare Supplement Plans or Medicare Supplemental Insurance. If you have Original Medicare and a Medigap policy, Medicare will pay first and your Medigap policy will fill in the gaps. For example, suppose you have a $5,000 ambulance bill and have not yet met the yearly Part B deductible ($140 in 2012). Medicare Part B will pay 80 percent of your bill, minus the deductible amount. Your Medigap policy will then pay the remaining 20 percent plus the deductible amount.
Medigap policies protect you from big medical bills
|Your cost with a Medigap policy*||Your cost without a Medigap policy*|
|Ambulance charge: $5,000||Ambulance charge: $5,000|
|Part B yearly deductible: $140||Part B yearly deductible: $140|
|Medicare Part B pays: $3,860||Medicare Part B pays: $3,860|
|Medigap policy pays: $1,140|
|You pay: $0||You pay: $1,140|
*Costs shown are for example only and do not represent exact calculations.
What are not considered Medigap policies?
The following plans do not supplement Medicare coverage, and thus, are not Medigap policies:
- Medicare Advantage Plans (like an HMO or PPO)
- Medicare Prescription Drug Plans(Part D)
- Employer's or union's plans
- Veterans' benefits
- Long-term care insurance policies
What benefits do Medigap policies cover?
Currently, there are 10 standardized Medigap plans and one high deductible plan, each represented by a letter (A, B, C, D, F, G, K, L, M, N, and high deductible F). Benefits and coverage rates vary with each type of plan, but in general, all Medigap policies cover the following benefits:
- Medicare Part A coinsurance and hospital costs (up to an additional 365 days after Medicare benefits are used)
- Medicare Part B coinsurance or copayment
- Blood (first 3 pints)
- Part A hospice care coinsurance or copayment
Some types of Medigap policies also cover:
- Skilled nursing facility care coinsurance
- Medicare Part A deductible
- Medicare Part B deductible
- Medicare Part B excess charges
- Foreign travel emergency
For a quick look at the benefits provided by standardized Medigap policies, please click here to view a Medigap Plan Benefits Chart. You can also click here for additional details about the benefits covered by Medigap plans.
What benefits are not covered by Medigap policies?
In general, most Medigap policies will not cover the following health services and supplies:
- Long-term care (care in a nursing home)
- Vision or dental care
- Hearing aids
- Private-duty nursing
Note: Federal Law allows insurance companies to offer "new and innovative" Medigap benefits. Under this law, a few Medigap plans may cover some vision-, dental- and hearing-related services. It never hurts to ask if such coverage is offered, but chances are, these services will not be covered.
Additional facts to know about Medigap policies
- You must have Medicare Part A and Part B to get a Medigap policy.
- Every Medigap policy must be clearly identified as "Medicare Supplement Insurance."
- A Medigap policy can only cover one person, so if you are married, both you and your spouse must buy separate policies.
- Not all types of Medigap policies may be available in your state.