What Exactly Are Medigap Plans and How Do You Choose the Right One?

According to the Centers for Medicare and Medicaid Services (CMS), nearly 60 million people were enrolled in an Original Medicare or Medicare Advantage plan as of 2018.

Even with so many enrollees, though, many people don’t know that Medicare doesn’t actually cover all your healthcare costs. For example, Medicare Parts A and B in 2020 won’t pay for:

  • Non-medically necessary eye exams
  • Dentures
  • Cosmetic surgery
  • Acupuncture 
  • Hearing aids
  • Routine foot care

So, what are you to do if you want coverage for services not under Medicare? You get one of the ten Medigap plans on the market in 2020.

But what is Medigap and what exactly does it cover? Plus, how do you go about choosing the right Medigap policy? We’re going through those questions and more below, so you better keep reading for everything you need to know. 

Understanding Medigap Plans

Medigap policies are more formally known as Medicare Supplements. Since Original Medicare and Medicare Advantage plans don’t traditionally cover everything, you may have to pay out of pocket for care. Medigap plans seek to bridge this coverage gap.

What’s Covered Under Medigap?

Medicare Supplement Insurance helps patients pay for out of pocket costs Medicare policies don’t cover. This may include coinsurance and copayments required for Part A and Part B Medicare plans.

Almost all Medigap policies also help patients cover at least part of their deductibles.

Only one of the ten Medigap plans doesn’t pay for at least part of your Part A deductible. The remaining plans will cover much or all of your $1,408 60-day deductible.

Medicare Part B deductibles are different. As of this writing, Medigap plans aren’t allowed to cover the $198 Part B deductible for new enrollees. However, if you’re already covered under Medigap plan C or plan F, you can be grandfathered in, meaning these plans will cover your Part B deductible. 

The final service Medigap plans cover is foreign travel. Most Medicare plans don’t qualify if you seek care outside of the US. After meeting a $250 deductible, Medigap plans will cover up to 80% of foreign services you receive, as long as they’re medically necessary.

What isn’t Covered Under Medigap?

Medigap policies are meant to bridge gaps in care present in Original Medicare. That’s why Medigap policies should never replace a normal insurance policy. Medigap won’t cover services like:

Medigap plans also don’t cover drugs. You’ll have to enroll in Medicare Part D if you want to reduce your costs for medically necessary medications.

How to Compare Medigap Policies

Medigap plan requirements vary by state. For example, these policies are specially standardized in Massachusetts, Minnesota, and Wisconsin. See this link to learn more about the specific Medigap policies in your state

While all Medigap policies offer the same basic benefits, they each differ in their additional benefits. As of this writing, there are ten different Medigap plans on the market, plus one high-deductible Medigap plan, which we’ll talk about later. 

If you’re trying to determine the right plan for your needs, here are the top factors you must consider. 

Coinsurance 

All ten Medigap plans pay coinsurance for services covered under Medicare Part A.

They’ll also pay for any additional hospital costs accumulated after a patient uses up their Medicare benefits. However, Medigap plans will only cover up to 265 days of additional hospital care. 

Almost all plans cover coinsurance and copayment for services received under Medicare Part B. Medigap Plans K and L only cover 50% and 75% of Part B coinsurance and copayments, respectively. 

A final note is that Medigap Plan N covers Part B coinsurance but not copayments. Patients must pay $20–$50 for emergency room visits that don’t result in an inpatient stay. 

Deductibles

Plan A is the only Medigap policy that will not cover Medicare Part A. Plans K and M will only pay 50% of the Part A deductible. Plan L covers a bit more of the Part A deductible at 75%.

Medigap B, D, G, and N plans offer 100% coverage for the Medicare Part A deductible. 

Plans C and F are the only plans that cover 100% of both Part A and Part B deductibles. Keep in mind, though, that these are the plans no longer available to new Medigap enrollees. 

Out-of-Pocket Limit

Most Medigap plans don’t have an out-of-pocket limit.

Medigap Plan K does have an out-of-pocket limit of $5,8880. Plan L also has a limit of $2,940. Once you meet the out-of-pocket limit and Medicare Part B deductible, though, plans K and L will cover 100% of all medically necessary care for the rest of the year. 

Blood Transfusion Services

Almost all Medigap plans cover blood transfusions and other blood-related services, up to the first 3 pints. Plans K and L are again exceptions here. They only cover 50% and 75% of the cost, respectively. 

Hospice Care

All but Medigap Plans K and L cover 100% of hospice care. The former plan only covers 50% of hospice care while the latter will pay for 75%. 

Skilled Nursing Facility Care

Medigap plans cover Skilled Nursing Facility services in almost the exact same way as hospice care. The only difference is that Medigap plans A and B do not cover any of these services. 

Foreign Travel

Plans A, B, K, and L don’t provide coverage if you need care outside of the US. The remaining six Medigap policies will cover up to 80% of medically necessary services outside of the US. 

Optional High-Deductible Medigap Plans

In some states, patients can enroll in a high-deductible version of Medigap plans F and G. Here’s how it works: patients pay a coinsurance, copayment, and annual deductible of $2,340. You won’t get any coverage until you hit each of these.

Note that only high-deductible Medigap plan G is available for new enrollees. Plan F is no longer available to new Medigap enrollees. 

Enroll in a Medigap Plan Now!

Medigap plans offer additional coverage to patients for whom Medicare just isn’t enough. You can get additional benefits for out-of-pocket costs like coinsurance, hospice care, and even foreign travel.

Ultimately, choosing the best Medigap plan depends on your specific insurance needs. What do you do if you don’t know exactly what you need? Get in touch with Medicare On Video today to speak with one of our expert licensed Medicare insurance agents! 

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