Medicare Supplement Insurance - Medigap
If you are over age 65, or approaching retirement age, then you either already are, or are looking forward to, receiving Medicare Health Benefits. Medicare as it was designed to be, is a wonderful safety net for seniors, and it does provide a lot of affordable medical coverage, but it doesn't cover everything. To make up for these deficits in benefits, the federal government created standardized plans to be sold by independent private insurance companies. These Supplemental Medicare Health Insurance plans have become known as "Medigap" plans - because they make up for the "gaps" in Medicare coverage.
Medicare itself is divided into two parts: A and B, and they each have their respective "gaps".
Gaps in Part A
Medicare Part A covers the basic services such as inpatient hospital stays, skilled nursing, home health, and hospice services. Yet, you are still responsible for:
- Skilled nursing facility services for more than the 100 days per illness
- Your deductible for Hospital stays
- Hospital coinsurance payments
- Your coinsurance payment for skilled nursing facilities
Gaps in Part B
Medicare Part B covers some additional services not included in Part A. Part B offers coverage for services such as influenza and pneumonia vaccinations, outpatient hospital procedures, chemotherapy, and renal dialysis, among others services. Part B also covers medical equipment such as canes, walkers etc. Yet there are still things that Part B does not cover. Some of the gaps found in Medicare Part B are:
- A 20% coinsurance payment. Keep in mind that Medicare covers only 80% of the approved rate for all services and items within part B. This amount can vary depending on the services approved.
- Often doctors and physicians charge more than what Part B Medicare reimburses – and you are liable for the difference.
Currently it is estimated that there are over 10 million Americans with a Supplemental Insurance or Medigap Plan. As first introduced, the standardized plans were designated A-L. All Medigap plans starting with the basic Plan A offer:
- Hospital copayments for 60 to 90 days
- All Medicare-eligible hospital charges for a period of up to 365 additional days during your lifetime
- 20% coinsurance for Medicare Part B eligible expenses, after you have met your Part B deductible
The various other plans labeled B-L, add additional benefits in cascading order, so in other words Plan C has benefits that Plan B does not, Plan D has more benefits than C but less than E, and so on and so on. Any private insurance company that sells Medigap insurance must sell the basic Plan A - but is not obligated to offer all of the other plans.
As of June 2010, significant changes have been made to the standard Medigap insurance plans. For details on these changes see our page entitled Changes in Medigap Insurance.