Medigap Insurance Guide

In order to account for the holes in coverage left by Medicare Parts A and B, some people choose to purchase supplemental coverage known as a Medigap plan. While issued by the Centers for Medicare and Medicaid Services (CMS), Medigap plans are administered by private companies. Medigap policies sold prior to the changes brought about prior to the introduction of Part D Prescription Drug Plans in 2006 may include coverage for prescription drugs. However, those sold after January 1, 2006 are prohibited from including coverage for prescription drugs. Medigap plans may only legally be sold to beneficiaries of Original Medicare Parts A and B, and it’s illegal to purchase both a Medigap and a Medicare Advantage Plan simultaneously.

Many employers and unions offer Medigap coverage for their employees and retirees. It’s vitally important that you purchase a Medigap policy during your open enrollment period, because if you wait you may not be able to select the Medigap policy of your choice.

Medicare Coverage

You’re likely now wondering what types of supplemental coverage are available through Medigap plans. The coverage offered depends upon the plan, but Medigap insurance generally provides additional coverage for medical expenses that would otherwise come out-of-pocket, such as:

• Co-payments
• Co-insurance
• Deductibles
• Medical services outside the United States
• Additional preventive services not covered by Medicare Parts A and B

For instance, assume you purchase a Medigap policy that provides coverage for Plan B co-insurance but not the Plan B deductible. Then, you must pay the first $155 for doctor visits in a year to fulfill your deductible, but the Medigap insurance covers the remaining 20 percent co-insurance for the remainder of the year that you would normally have to pay under Part B coverage.

All Medigap insurance coverage provides the following basic coverage:

• Part A co-insurance/co-payment (not the deductible) and the cost of one year of extra hospital care after the end of Medicare coverage
• Part B co-insurance (usually 20 percent of the amount owed after the deductible)
• The first three pints of blood
• Part A co-insurance for hospice care

Types of Medicare Plans

No matter from what insurance company you are purchasing Medigap coverage or how much you are paying, the types of Medigap plans are standard, labeled A through N; although, policies E, H, I, and J are no longer sold to new enrollees after June 1, 2010 (But, they are still continued for those who bought them prior to that date). Plan A is the most basic, with services fluctuating with other policies. Plan coverage includes:

• Policy A – Basic benefits
• Policy B – Basic benefits, Part A deductible
• Policy C – Basic benefits, Part A deductible, skilled nursing facilities, Part B deductible
• Policy D – Basic benefits, Part A deductible, skilled nursing facilities, foreign travel emergency
• Policy F -- Basic benefits, Part A deductible, skilled nursing facilities, Part B deductible, foreign travel emergency, Part B excess charges
• Policy G -- Basic benefits, Part A deductible, skilled nursing facilities, foreign travel emergency, Part B excess charges
• Policy K -- Basic benefits, 50 percent of Part A deductible, 50 percent of skilled nursing facilities, Part B deductible, foreign travel emergency, Part B excess charges
• Policy L – Basic benefits, 75 percent of Part A deductible, 75 percent of skilled nursing facilities
• Policy M -- Basic benefits, Part A deductible, skilled nursing facilities, foreign travel emergency
• Policy N -- Basic benefits, Part A deductible, skilled nursing facilities, foreign travel emergency

Medigap Premiums

Purchasing Medigap Insurance is voluntary, and the beneficiary is responsible for paying monthly or quarterly premiums to the Medigap insurance provider, with the payment ranging widely depending upon the depth of the coverage provided and the company that is providing it.