Part 2: Enrolling in Medicare: Medicare Supplement Plans (Medigap)
When enrolling in Medicare, you’ll want to consider Medicare Supplement Insurance Plans or “Medigap” plans. Medigap is designed to cover the gaps in Original Medicare coverage so you have fewer out-of-pocket costs, like deductibles, copayments and coinsurance. Medigap is not an HMO or PPO like Medicare Advantage. It’s a supplemental plan that helps pay some or part of your out-of-pocket costs for Medicare-covered services. Your health-care provider will submit a bill to Medicare, which will pay its part of the claim. Then Medicare will send the bill to your Medigap plan, which will pay its part of the bill. Some Medigap plans may eliminate the costs of deductibles, copayments and coinsurance, while others will cover a portion of these costs.
To join a Medigap plan, you must be enrolled in Original Medicare Parts A and B. If you are in a Medicare Advantage Plan, you’ll need to disenroll from it before you can participate in a Medigap plan. You can’t have both Medigap and Medicare Advantage at the same time.
Ten different Medigap plans are available, all of which have different benefits. All the Medigap plans cover the Part A coinsurance and hospital costs up to one year after you’ve used up your Medicare benefits. From there, each plan offers a different combination and amount of coverage. Following are five of the 10 possible benefits a Medigap plan might offer:
- Part B coinsurance payment
- Part A hospice care coinsurance or copayment
- Skilled nursing facility coinsurance
- Part A deductible
- Part B deductible
Once you’ve chosen a Medigap plan, you’ll pay a private insurer a monthly premium in addition to your Part B premium. It’s important to know that no Medigap plans offer prescription drug coverage. This was offered through Medigap plans in the past, but now that Part D prescription drug coverage is available, it’s no longer offered through Medigap.
In addition to distinguishing between Medicare Advantage and Medigap, the Medicare website also makes other distinctions between Medigap and other forms of insurance that are not Medigap:
- Medicare Prescription Drug Plans
- Employer or union health plans (e.g., the Federal Employees Health Benefits Program)
- Veterans’ benefits
- Long-term care insurance
- Indian Health Service and other health plans for Native Americans
Now that you’ve learned about Medigap – what it is and what it covers – you know about the different benefit options available through Medicare. Next, we’ll turn our attention to how you time enrolling in Medicare and talk about the enrollment process.