Medigap for Dummies: How to Pay for Costs Medicare Won’t

Medicare Supplement Plans (also known as Medigap) are insurance policies that individuals on Medicare can purchase to cover out-of-pocket costs beyond what Medicare covers for health care services. Medigap policies are sold by private insurance companies and offer various coverage levels, based on which standardized plan is purchased.

Typically, all insurance companies are required to sell the same standardized plans, labeled A through N, but can charge different premiums for the same plan. Many individuals take advantage of Medigap to avoid accumulating potentially large medical bills that are the result of coinsurance or deductibles associated with Medicare.

What costs does Medigap cover?

Medigap offers peace of mind for Medicare recipients that they will have coverage for medical expenses that are outside of Medicare coverage. Such costs could include copayments, coinsurance, deductibles or in some cases, services not eligible for Medicare coverage.

The following list provides an idea of the costs covered by Medigap Plan G (one of the most comprehensive Medigap plans) as described by Medicare. Other plans may differ in coverage levels or covered services, and it’s up to the individual purchasing the plan to decide which plan best meets his or her needs.

Costs covered by Medigap Plan G: 

• Medicare Part A coinsurance (Medicare Part A is the hospital coverage of Medicare);
• Hospice coinsurance or copayment;
• Medicare Part B coinsurance or deductible;
• blood (first three pints);
• skilled nursing facility coinsurance;
• Medicare Part B copayments or coinsurance (Medicare Part B is the medical services and preventive portion of Medicare);
• Medicare Part B excess charges; and
• foreign travel emergency medical expenses.

While Medigap Plan G lists 100 percent coverage for these out-of-pocket expenses, other plans may cover only 50 percent or 75 percent of the same costs. Other plans may include only some of these options for coverage. Each Medicare recipient should shop for the Medigap plan that includes the coverage he or she needs within the premium price range he or she is comfortable paying each month.

Prescription coverage is no longer an option through Medigap insurance.

How do I purchase a Medigap policy?

Medigap policies are available for purchase through private insurance companies nationwide. You will want to consider all options and shop for competitive pricing when purchasing your Medigap insurance. Factors such as where you live, your age and discount programs can affect the pricing of your policy.

It is important that you enroll in Medigap during your open enrollment period (a six-month period beginning the first day of the month in which you turn 65 years old and are enrolled in Medicare Part B) to avoid an inflated premium due to any pre-existing conditions or other medical underwriting concerns. People suffering serious illnesses like Lou Gehrig’s disease who qualify for Medicare almost immediately need to start thinking about Medigap immediately as well.

Premiums can vary greatly for the same plan from one carrier to another, warns Medicare. Weiss Ratings noted that the “national average cost of a Medigap policy for a 65-year-old female ranged from $439 to $5,776.” That’s a huge difference and warrants a fair amount of research prior to purchasing your plan.

Consult an Expert 

If you feel overwhelmed by the many options, premiums and coverage levels offered by Medigap insurance carriers, Rob Levine & Associates can help. Call us today at 1-866-LAW-SSDI to set up a consultation to discuss your case with an attorney.