Why Should I Get Medigap Insurance?

Two questions that our potential clients often bring up are “what is Medigap Insurance?” and “Do I need it?”

Medigap Insurance, or a Medicare Supplement,  is a kind of health insurance policy sold by private insurers to cover the gaps in original  Medicare coverage, called Parts A and B. They are also called Medigap Plans. An easy way to think of a Medicare Supplement is to picture it as an insurance card that sort of sticks to the back of your old original Medicare and pays for costs that normal Medicare would normally pass on to you.

Medicare has gaps like co-insurance, co-payments, and deductibles that you must pay for when accessing medically approved services. When you have a Medigap Plan, Medicare will first pay its share of your medical expenses, and then your supplement will step in a pay its share. It’s usually the remainder of your whole bill but that depends on which Medigap policy you choose.


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Every Medicare Supplement has to match the outlines created by Medicare itself when it standardized its plans back in 1990. Each standardized Medicare Supplement is identified by a letter such as A, B, C, D, F, G, K, L, M, and N. Each one of these lettered policies is required to provide the same basic benefits regardless of the insurance company that sells the policy. This means that price or monthly premiums are really the only difference between the Medicare Supplements with the same letter offered by multiple insurance carriers.

Perhaps the most confusing thing about Medicare Supplements is the terminology, so let’s take a look at the benefits as described by Medicare, starting with your Medicare Part A Coinsurance. All Medicare Supplements offer this benefit. It covers the very expensive daily hospital copays that you begin accuring at 60th day in the hospital, and even pays for up to 365 additional days of hospital coverage after Medicare stop paying.

Every supplement plan also covers the Medicare Part B coinsurance or copayment which is one of the most important benefits. Generally, since Medicare only covers 80% of your Medicare Part B outpatient expenses, this benefit is what pays the other 20% for you. This can be crucial for high ticket items like cancer treatment or dialysis.

This benefit which is also covered under every Medigap policy pays for the first three pints of blood in a blood transfusion. Since Medicare only pays for the fourth pint and above. Blood is very expensive so this is a good benefit.

Under the Part A Hospice Coinsurance or Copayments benefit, Medigap insurance pays for the hospice expenses that Medicare doesn’t.

In some supplements, they also offer a skilled nursing facility coinsurance benefit. Medicare allows for 100 days of skilled nursing facility care after you’ve been in a hospital and need nursing care while you recover. However, Medicare only pays the entire cost for the first twenty days. A Medigap plan with skilled nursing facility coverage will pay for the other 80 days.

The Medicare Part A deductible in 2012 is $1,156. You will pay this each time you access Part A benefits such as in-patient hospital stays when have not been in the hospital for the previous 60 days. Some Supplements pay this bill for you. In 2012, the Medicare Part B deductible is $140 per year. You will pay this deductible once per year for services like doctor visits, labwork, or physical therapy, unless your Medicare Supplement provides this benefit.

Medicare providers can either accept Medicare’s assigned rates for each service or, if they choose, charge you in excess charge that can be up to 15% above the assigned rates. This can be pricey for items like diagnostic imaging or surgery. So you can choose a Medicare Supplement that covers this expense if you wish.

Finally, since Medicare is a US Health Insurance Program, it does not offer you coverage outside our country, but some Medicare Supplements include a foreign travel benefit that will pay 80% of your expenses up to $50,000 after a small deductible.

By now you’re probably asking yourself, ‘How do I choose the right Medigap Insurance?’ Fortunately, since Medicare Supplements are standardized, you will be able to select your supplement and know exactly which benefits you are purchasing. There are several factors which you will want to know about each insurance company before you can choose your Supplement.

So first of course is rates. What premium are they offering to you, and is it competitively priced? Perhaps just as important as rates though is the rate trend history. Most Medicare Supplements will have an annual rate increase to keep up with medical inflation. What kind of rate increases has each carrier you’re considering had over the last three years, and are the rate increases reasonable or significantly higher than the competitors? Finally, you’ll want to compare finance ratings. Insurance companies are analyzed by a number of different companies that dig into their financial stability and give reports or grades on the fiscal health of the insurer.


To View 2014 Rates on Medigap Insurance Instantly in Your Area

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At MedigapPlansGuide.com, we’re here to help and make the process extremely easy. Simply enter your zip code at the top of the page to get instant quotes, or give us a call. There’s never a charge for our service and our clients love the fact that we check their rates each and every time they get an increase to continually keep them paying the lowest premiums possible for their Medigap Coverage.