Medigap plan insures against medical and healthcare expenses that are not paid for by original Medicare. Policy coverage costs can differ depending upon where the insured lives, his or her general health, and coverage.
Standardized Medigap policies must conform to federal and state consumer protection laws:
• They must be identified as Medicare Supplement Insurance.
• Insurers may sell standardized policies, categorized by letters.
• Some policies offer additional benefits along with the basics.
Insurers decide which gap policies it wants to sell. State laws may affect which plans are offered. Insurers selling Medigap policies:
• Need not offer every type of Medigap plan
• Must offer Plan A if offering any gap policy.
• Must offer Plan C and Plan F if offering any gap plan.
Consumers can purchase Medigap plans when they are first eligible:
• The best time to acquire a policy is during the six-month open enrollment period for Medicare.
• Consumers can purchase any Medigap policy sold in their state, even with current health problems.
• The enrollment period begins in the month the consumer turns 65 when the insured enrolls in Medicare Part B medical insurance.
• After the enrollment period closes, it may be more difficult and expensive to purchase a Medigap plan.
Enrollment in Medicare
Medicare enrollment for Parts A and B is offered to U.S. citizens age 65 and older or younger disabled people. Qualifying consumers have a seven-month Medicare enrollment period.
Medicare Parts A and B were the first plans offered to consumers by the federal government. Part A covers the insured’s hospital stays. Part B is medical care coverage. Medicare Part D covers prescription medicines, requiring the insured to pay insurance premiums and deductibles. (Consumers are not required to carry Medicare Part D.)
Medicare Part C Plans
It is possible to maintain separate plans or consolidate all of them into a Medicare Part C plan. These plans are available through a Medicare Advantage plan offered by private insurers.
Medicare Part C must provide all services offered by Medicare Parts A and B. Many Medicare Part C plans offer added coverage as well. Although Medicare pays the chosen insurer for a portion of coverage each month, the insured is also required to pay premiums:
- To enroll in Part C, enroll in Parts A and B first to obtain government coverage.
- Part C plans usually include prescription coverage, requiring the insured to give up Part D if switching to Medicare Advantage.
- Medicare Advantage, Medicare Part C, bundles Medicare Parts A and B along with supplemental services including prescription medicine coverage. Medicare enrollment in Part C follows the same open enrollment window.
Individuals already covered by Part A who request Part B during the open enrollment period can also request Part C from April 1 to June 30.
Medicare Advantage enrollment starts October 15 and closes on December 7. Medicare Advantage disenrollment starts on January 1 and ends on February 14.
Medigap Policy Costs:
Medicare does not pay for Medigap policies. The consumer must pay Medigap policy premiums but the Medigap policy will help pay Part B bills:
- In most Medigap plans, the consumer agrees to allow the insurer to directly access Part B claims from Medicare.
- The Medigap policy insurer then pays the doctor.
- Some Medigap plans also offer these services for Part A claims.
The insured should ask his or her doctors if they participate in Medicare. If so, physicians must accept the assignment for Medicare patients. Medigap insurance payments must be made directly to the provider if the insured requests this.
Compare Gap Plan Costs
Premium costs can differ even when insurers offer the same policy. When shopping for Medigap coverage, compare apples to apples: for example, make a comparison of Plan A from Insurance Company 1 and Plan A from Insurance Company 2.
Some states allow consumers to purchase another Medigap policy type called Medicare SELECT. If purchasing a SELECT plan, the consumer has the right to change his or her mind within a 12 month period and select a standard gap policy instead.