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Medigap Insurance


Medigap is the term that applies to private health-care insurance policies designed to cover the “gaps,” or out-of-pocket expenses, that Original Medicare does not pay for. Also known as Medicare supplement insurance, Medigap covers the many deductibles, coinsurance amounts, co-pays, and other limitations and services that Medicare does not pay. For example, a Medigap policy might cover Part B excess charges and emergency health care while the beneficiary is traveling outside the United States.


Clearly, Medigap policies are purchased because Medicare does not pay for total health care. And while a Medigap policy will cover some of these gaps, it doesn’t pay for all. A Medigap policy can help lower out-of-pocket costs and expand coverage.


A Medigap policy only works in conjunction with the Original Medicare plan. So, if an individual decides to join a Medicare Advantage plan, Medigap coverage is unnecessary. The Medigap policy will not pay deductibles, co-pays, or other cost sharing for anyone enrolled in an Advantage plan. Medicare beneficiaries generally drop their Medigap policies when they enroll in a Part C plan. Those who enroll in Original Medicare may benefit by purchasing a Medigap policy.


Standardized Medigap Policies


A Medigap policy must meet the statutory definition of a Medicare supplement policy as contained in Section 1882(g)(1) of Title XVIII of the Social Security Act. Since 1992, Medigap policies have been standardized. Each plan design provides for a specified set of benefits and is titled simply as a letter of the alphabet. For each plan design, the benefits are the same among all insurers. Before June 1, 2010, there were 14 standard plan options; as of June 1, 2010, the plans were revamped to reflect changes in the Medicare market. The 2010 changes included the addition of two plans (M and N) and the elimination of four others (E, H, I, and J). Plans sold after June 1, 2010, must conform to these new changes; plans that were purchased before this date will continue in force.


Standardized Plan Benefits


Every Medigap policy must provide for a minimum level of “basic” or “core” benefits. These are represented by Plan A. Every other plan must include these basic benefits and adds additional benefits.

Basic (core) benefits:

  • Medicare A and B coinsurance—Covers the coinsurance cost incurred during a hospital stay under Medicare Part A and the coinsurance on Medicare Part B services once the deductible is met.
  • 365 days extra hospital stay—Covers the full cost of 365 extra days of a hospital stay after all Medicare hospital benefits are exhausted.
  • three pints of blood—Covers the cost of three pints of blood per year.
  • hospice care—Covers all cost-sharing billed to the Medicare beneficiary for hospice care (including respite care) under Medicare Part A.

Other benefits:

  • Part A deductible—Covers the deductible on Medigap Part A, which varies from year to year.
  • foreign travel emergency—Covers 80 percent of emergency care administered outside the country during the first 60 days of any trip. A deductible and lifetime maximum apply.
  • skilled nursing facility (SNF) coinsurance—Covers up to a stated charge per day toward the cost of a stay in a skilled nursing facility during days 21 through 100. (Medicare pays 100 percent of SNF care for only the first 20 days.)
  • Medicare Part B deductible—Covers the annual deductible on Medicare Part B, which varies from year to year.
  • Medicare Part B excess charges—Helps cover the additional cost of services by doctors who do not accept Medicare assignment, meaning they do not accept Medicare’s reimbursement as payment in full.
  • Part B preventive care—Covers all cost-sharing billed to the Medicare beneficiary for preventive care services under Medicare Part B. 


Ask Ms. Medicare





Medigap or Medicare Advantage?


People often confuse the two plans, but their differences are great. Here's what you need to know


Q. What's the difference between a medigap plan and a Medicare Advantage plan? I've heard both described as insurance that is "supplemental" to Medicare.

A. There are very big differences between these two types of insurance, although both are options for people with Medicare. Technically, only medigap counts as "Medicare supplemental insurance" — in fact, that's its formal name — but Medicare Advantage plans may provide some extra benefits that could be considered as supplementing Medicare.



Medicare Advantage comprises a variety of private health plans — most often HMOs and PPOs — that Medicare offers as a coverage alternative to the traditional program. Every plan must cover all the same benefits that traditional Medicare covers. But the plans can charge different copayments (often lower than the traditional program but not always) and offer extra benefits. Most charge a monthly premium in addition to the Part B premium, but some don't. Most include prescription drug coverage at no additional cost. Some cover routine hearing and vision services, usually as a separate package for an additional premium.


Another difference from the traditional program is that most plans require you to go to doctors and other providers within their service network or pay higher copays for going out of network.

Note: If you enroll in a Medicare Advantage health plan you cannot, by law, also purchase a medigap policy, even though you still have out-of-pocket expenses under that health plan. If you stay in traditional Medicare, you would need to join a separate Part D plan to get prescription drug coverage and pay an extra premium for it. And medigap does not cover out-of-pocket drug expenses.

Comparing and choosing plans

When deciding whether to buy a medigap policy to cover expenses in traditional Medicare or enroll in a Medicare Advantage plan, it's important to look at the details of each plan available to you in order to find the one that best suits your needs and pocketbook. Medicare has online programs to help you make these comparisons.

Medigap policies: Visit the Medigap Policy finder at the Medicare website.
Enter your ZIP code and follow the instructions. You will see a chart showing all the policies (each labeled with a different letter of the alphabet) available in your area. Clicking on "View Details" for each policy brings up full information for that policy. To see which insurers sell the policy, click on "View All Companies" on the right hand side of the details page. This provides contact information for the companies. You will need to contact them for a premium quote.

  • If you have Medicare because of disability: Medigap policies are not always available to beneficiaries under age 65. To see the situation in your own area, click on the link marked "Show only policies available to people under age 65" at the top of the chart that lists all policies. If any appear, click on those for details and then click on "View All Companies." Insurers that sell policies to people under age 65 are marked "Yes" in the first column.Medicare Advantage plans: Visit the Medicare Plan finder at the Medicare website. Enter your ZIP code and follow the instructions. Eventually you will see a list of about 10 health plans. To see the full list of plans available in your area, click on "View 20" or "View 50" at the top of the list. This page provides
  •  broad information such as premiums and whether prescription drugs are covered. To see details of each plan's costs and benefits, click on the name of the plan. If you have Medicare because of disability: Medicare Advantage plans are all available to beneficiaries under age 65, with one exception. You cannot enroll in any of these plans if you already have end-stage renal disease, defined as needing regular dialysis or a kidney transplant.
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