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Is a Medigap Supplemental Insurance Policy Right for You?

Maryalene LaPonsie | August 30, 2010

The Basics of Medigap Supplemental Insurance Policies

If you are a senior citizen, or otherwise eligible for discount health insurance through Medicare, you may think that your medical insurance needs have been met. However, Medicare does not pay all of your health care bills. To ensure full medical coverage, you may want to consider purchasing Medigap supplemental insurance.

A Primer on Supplemental Insurance

Supplemental insurance is not the same as a regular medical health insurance policy. Supplemental health insurance is meant to cover only those expenses not paid by your main medical insurance provider. Because these policies usually pay a smaller portion of your overall health care costs, they often have an affordable health insurance rate.

Medigap is a supplemental insurance policy designed to complement your Medicare coverage. It is low cost health insurance that fills the "gaps" in your Medicare coverage. For example, Medigap can help pay for your co-insurance, deductibles and other services not covered by Medicare.

You must have Medicare Parts A and B to purchase discount health insurance through Medigap. However, if you have Medicare Part C, otherwise known as Medicare Advantage, you are not eligible for Medigap supplemental insurance. Medigap policies do not pay any expenses for Medicare Advantage participants.

Medigap Plans A-N

The government has made purchasing Medigap supplemental health insurance easy. When shopping for Medigap, you should find policies labeled Plans A-N. Each plan offers the same benefits regardless of which insurance company you choose. If you live in Massachusetts, Minnesota or Wisconsin, your state has its own standardized Medigap supplemental insurance policies. You should contact your state insurance office for information on your state's Medigap plans.

All Medigap supplemental insurance plans must cover the following basic benefits:

  • Co-insurance payments for hospitalization
  • A lifetime benefit of 365 days of hospitalization should you reach the maximum covered by Medicare
  • Co-insurance payments for hospice care
  • All Part B co-insurance and co-payments after you've met the Medicare deductible
  • Co-insurance for covered preventative care
  • The first three pints of blood you may need each year

Depending on which plan you select, your supplemental insurance may also cover:

  • Part A deductible for hospitalizations
  • Co-insurance for a skilled nursing facility
  • Emergency health care coverage if you travel out of the country
  • Part B excess charges--the difference between what your doctor charges and what Medicare pays.

Medigap Plans K, L, M, and N have different cost-sharing structures and may only pay a percentage of your co-insurance and deductibles. Although these plans may not provide the same level of medical coverage, they are available at a reduced health insurance rate.

Several changes to Medigap supplemental insurance are being implemented in 2010. Plans M and N are available for purchase beginning June 1, 2010. At that time, Plans E, H, I and J will no longer be sold as new policies. However, individuals who have already purchased one of these plans can keep their coverage.

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