Dear Marci,
I am 65 years old and have Original Medicare. I receive a lot of costly care and have heard from my doctor that I should look into purchasing a Medigap policy to help lower my out-of-pocket costs. Can you tell me more about Medigaps?
-Louis (Buffalo, WY)
Dear Louis, Medigaps are health insurance policies that offer standardized benefits to work with Original Medicare (not with Medicare Advantage). They are sold by private insurance companies and are designed to cover deductibles, coinsurance, and copayments. People may refer to these charges as the “gaps” in Original Medicare’s coverage, hence the term “Medigap.” If you have a Medigap, you will likely not have any out-of-pocket costs for an inpatient hospital stay or outpatient doctors’ visits if your providers accept Medicare assignment. Medigaps may also cover health care costs that Medicare does not cover at all, like care received when travelling abroad. While you would have to pay an additional monthly premium for your Medigap, your out-of-pocket costs for the care you receive is greatly limited. This means Original Medicare and a Medigap may be a more affordable option for you if you have more health needs and receive costly medical care throughout the year. You can read more about the differences between having a Medicare Advantage Plan and having Original Medicare with a Medigap here. Depending on where you live and when you became eligible for Medicare, you have up to 10 different Medigap policies to choose from: A, B, C, D, F, G, K, L, M, and N (policies in Wisconsin, Massachusetts, and Minnesota have different names). Each policy offers a different set of standardized benefits, meaning that policies with the same letter name offer the same benefits. However, premiums vary from company to company. All policies must offer the following basic benefits:
Hospital coinsurance coverage
365 additional days of full hospital coverage
Full or partial coverage for the 20% coinsurance for provider charges and other Part B services
Full or partial coverage for the first three pints of blood you need each year
Hospice coinsurance for drugs and respite care
Beyond these basic benefits, each standardized Medigap covers a different amount of your Medicare cost-sharing. Medigap policy A is often the least expensive, but it only covers the basic benefits listed above. Policies C and F are the most comprehensive, but they generally have higher premiums. Depending on which Medigap policy you choose, you can get coverage for additional expenses, including:
Hospital deductible
Skilled nursing facility coinsurance
Part B deductible*
Emergency care outside the U.S.
At-home recovery
Preventive care that Medicare does not cover
Excess physician’s charges
*People newly eligible for Medicare on or after January 1, 2020, cannot purchase Medigaps that pay for the Part B deductible. This includes Plan C and Plan F. If you became Medicare-eligible before this date, you will still be able to purchase Plan C or Plan F. To learn about Medigaps in your state and your options, I recommend you contact your local State Health Insurance Assistance Program (SHIP) by calling 877-839-2675 or visiting www.shiphelp.org. Note that enrollment rules for Medigaps differ from those for Original Medicare or Medicare Advantage Plans. We’ll be covering when one can purchase a Medigap in our next newsletter, so stay tuned! -Marci
Article Submitted by:
Stephanie Kirk, owner JC Madison Inc.
360-779-1082
18887 WA-305 # 300, Poulsbo, WA 98370