Common Concerns

 

 

 

 

Medigap

 

WHAT IS MEDIGAP?

 

Not too many people are familiar with Medigap insurance, although it would be helpful to them if they were. It can potentially be very helpful to individuals seeking coverage for health care needs.

 

Medigap is an insurance which covers the gaps in health care coverage not covered by Medicare. Although Medigap is a private coverage insurance program or offering, it is highly regulated by both federal and state government.  For this reason, it is affordable for many members of the population.

 

Since the cost of health care is so high these days, even if you're only responsible for the deductibles, a major illness could have you facing big bills. When doctors or surgeons or other providers charge more than Medicare finds “reasonable,” you will have to pay the difference.

 

Medicare tells doctors (“assigns”) how much it will pay for any given service. Some doctors charge more than Medicare assigns. When a doctor does not “accept assignment” in this way, you the patient must pay the difference. Plans F, I and J pay 100% of this additional charge.( See chart below).  Prior to a visit, ask if your provider accepts “assignment”.  This may help you avoid unexpected health care costs.

 

 

Standardized Medigap Plans and Benefits

 

There are 12 Medigaps plans designed to help fill the gaps in Medicare coverage. The plans are standardized to offer the same benefits regardless of which company offers them. The only difference between companies is cost.

 

The most popular Medigap plans are C and F. Note: The numbers listed below are for 2007.

 

Your State Department of Insurance can give you a list of companies which sell Medigap plans in your state. You can also call your State Health Insurance Assistance Program or the National Medicare Hotline (1-800-MEDICARE) for free Medicare help. In addition, the Medicare.gov web site lets you compare Medigap plans in your area.  (on a personal note, I have had difficulty getting through to the Medicare Hotline.  I suggest your local State Insurance Office as the first call)). 

 

 

When should you buy Medigap insurance?

 

It is best to apply for Medigap insurance sometime in the first six months of receiving coverage by Medicare. During this first six months, insurers are required to sell you the policy you want, even if you are considered high risk, or have a preexisting condition. Medigap are guaranteed to be renewable, and cannot be canceled as long as you keep paying the premiums.

 

There are ten different standardized Medigap plans authorized by the federal government. However, individual states can decide which and how many are offered for sale to its residents. The basic coverage of Plan A is offered in every state, and every insurance company which sells Medigap must offer Plan A coverage.

 

Plan A covers payments you would be responsible for if you were hospitalized for over 60 days, and Medicare no longer covered you. Medigap also pays non-hospital care which Medicare Part B would not cover. Moreover,  Plan A would cover the first three pints of blood you would need, in or out of the hospital. Therefore, plan A is a basic coverage.

 

Plan J tends to be the most popular plan.  Plan J  pays the deductibles for all hospitalization expenses, the deductibles for non-hospital care, coinsurance charges for days 21 through 100 in a nursing home, all doctor’s fees over the approved amounts, at-home recovery care, prescription drugs, preventative medical care, and even foreign emergency medical care.,Plan J is the most costly of all of the plans, but it is also the most comprehensive of all of the plans.

 

Choosing among all the policies offered can be confusing, so study the various plans carefully. The Medigap insurer, MUST provide you with a comparison chart that explains clearly what each plan covers or does not cover. You can also call Social Security and ask them to send you their free booklet Guide to Health Insurance for People with Medicare. This is a very helpful booklet on the various alternatives available.  Consider calling your state’s Department of Aging to find out about various package plans offered in your state.  The United Seniors Health Cooperative at 1331 H. Street, NW, Suite 500, Washington, DC 20005, offers a free analysis of the various Medigap plans. It is wise to get in touch with them before making your decision.

 

Before you decide, do as much comparison shopping as possible, before you decide. The American Association of Retired Persons, or AARP, offers a plan, as do large groups such as Blue Cross/Blue Shield. Generally plans offered by large groups like these, are cheaper.

 

In the end, study the plans and choose wisely, making sure that your Medicare and Medigap policies together cover as many health crises as possible.. No matter which insurance company offers a particular plan, all plans with the same letter cover the same benefits.

 

See the chart below for plan definition.  

 

For instance, all Plan C policies have the same benefits no matter which company sells the plan. However, the premiums can vary.  Premiums are the agreed upon costs paid for medical coverage for a defined benefit period.  In other words, if you join a Medigap plan, you pay premiums every year at the time of your new enrollment period. 

 

There are 12 Medigap Federally approved policies that cover basic benefits as defined by Medicare.  Each policy/plan has additional benefits which supplement basic Medicare coverage.  Those additional benefits vary according to the plan.

 

Medigap Plans: Listing by Plan

 

There are 12 standard Medicare supplemental (Medigap) insurance plans which help pay for some of your costs in the Original Medicare Plan and for some health care costs the Original Medicare Plan will not  cover.. (If you are in a Medicare Advantage Plan, such as a Medicare Health Maintenance Organization (HMO), you don't need a Medigap policy.)

 

Each standard plan, labeled A through L, offers a different set of benefits, fills different "gaps" in Medicare coverage, and varies in price. Medigap plans K and L are new plans which became available in 2006. The basic benefits for Medigap plans K and L are different from the basic benefits offered in plans A through J. These plans are designed to have lower monthly premiums, but have higher out-of-pocket costs.

 

If you are in a Medicare Advantage Plan, such as a Medicare Health Maintenance Organization (HMO), you don't need a Medigap policy. If you live in Massachusetts, Minnesota or Wisconsin, you have different standard Medigap plans to buy. Check with your state insurance department.

To learn more about Medigap plans in your area, you may also access the Medicare Personal Plan finder.

 

Basic Benefits

 

All Medigap plans must cover certain basic benefits. These basic benefits are as follows:

 

Medicare Part A coverage:

 

 

  • Coinsurance for hospital days 61-90 ($248 in 2007) and 91-150 ($496 in 2007)

  • Cost of 365 more hospital days in your lifetime, once you've used all Medicare hospital benefits

 

 

Medicare Part B coverage:

 

  • Generally, all coinsurance and co-payment amounts after your meet the $131 (in 2007) yearly deductible for Medicare Part B

  • The first three pints of blood

 

 

Medigap Plan A

  • Basic Benefits

 

Medigap Plan B

 

  • Basic Benefits

  • Medicare Part A Hospital Deductible: $992 in 2007 for each benefit period for hospital services

 

 

Medigap Plan C

 

  • Basic Benefits

  • Medicare Part A Hospital Deductible

  • Skilled Nursing Home Costs:

    • Your cost ($124 in 2007) for days 21-100 in a skilled nursing home

  • Medicare Part B Deductible:

    • Yearly deductible for doctor services ($131 in 2007)

  • Foreign Travel Emergency

    • 80% of the cost of emergency care outside the U.S.

    • Up to $50,000 during your lifetime

    • You pay a yearly deductible of $250

 

 

Medigap Plan D

 

  • Basic Benefits

  • Medicare Part A Hospital Deductible

  • Skilled Nursing Home Costs

  • Foreign Travel Emergency

  • At-Home Recovery

    • Help for activities of daily living, such as bathing and dressing, if you are already receiving skilled home care covered by Medicare.

    • Help for up to eight weeks after you no longer need skilled care

    • Will pay up to $40 per visit, seven visits per week, or a total of $1,600 per year

 

 

Medigap Plan E

 

  • Basic Benefits

  • Medicare Part A Hospital Deductible

  • Skilled Nursing Home Costs

  • Foreign Travel Emergency

  • Preventive Care: Up to $120 per year for preventive services not covered by Medicare

 

 

Medigap Plan F*

 

  • Basic Benefits

  • Medicare Part A Hospital Deductible

  • Skilled Nursing Home Costs

  • Medicare Part B Deductible

  • Medicare Part B Excess Charges:

    • Pays 100% of the difference between your doctor's charge and the Medicare approved amount, if your doctor does not accept assignment

  • Foreign Travel Emergency

 

 

Medigap Plan G

 

  • Basic Benefits

  • Medicare Part A Hospital Deductible

  • Skilled Nursing Home Costs

  • Medicare Part B Excess Charges:

    • Pays 80% of the difference between your doctor's charge and the Medicare approved amount, if your doctor does not accept assignment

  • Foreign Travel Emergency

  • At-Home Recovery

 

 

Medigap Plan H

 

  • Basic Benefits

  • Medicare Part A Hospital Deductible

  • Skilled Nursing Home Costs

  • Foreign Travel Emergency

 

 

Medigap Plan I

 

  • Basic Benefits

  • Medicare Part A Hospital Deductible

  • Skilled Nursing Home Costs

  • Medicare Part B Excess Charges:

    • Pays 100% of the difference between your doctor's charge and the Medicare approved amount, if your doctor does not accept assignment

  • Foreign Travel Emergency

  • At-Home Recovery

 

 

Medigap Plan J*

 

  • Basic Benefits

  • Medicare Part A Hospital Deductible

  • Skilled Nursing Home Costs

  • Medicare Part B Deductible

  • Medicare Part B Excess Charges:

    • Pays 100% of the difference between your doctor's charge and the Medicare approved amount, if your doctor does not accept assignment

  • Foreign Travel Emergency

  • At-Home Recovery

  • Preventive Care

 

 

Medigap Plan K**

 

  • Basic Benefits

    • 100% of Part A coinsurance plus coverage for 365 days after Medicare benefits end

    • 50% hospice cost-sharing

    • 50% of Medicare-eligible expenses for the first three pints of blood

    • 50% Part B coinsurance after you meet the yearly deductible for Medicare Part B, but 100% coinsurance for Part B preventive services

  • 50% of Skilled Nursing Home Coinsurance

  • 50% of Medicare Part A Hospital Deductible

  • Annual out of pocket limit of $4,140 in 2007.

 

 

Medigap Plan L**

 

  • Basic Benefits

    • 100% of Part A coinsurance plus coverage for 365 days after Medicare benefits end

    • 75% hospice cost-sharing

    • 75% of Medicare-eligible expenses for the first three pints of blood

  • 75% Part B coinsurance after you meet the yearly deductible for Medicare Part B, but 100% coinsurance for Part B preventive services

  • 75% of Skilled Nursing Home Coinsurance

  • 75% of Medicare Part A Hospital Deductible

  • Annual out of pocket limit of $2,070 in 2007.

 

*Plans F and J also have a "high deductible option." If you choose the "high deductible option" on Medigap Plans F and J, you will first have to pay a $1,860 deductible in 2007 before the plan pays anything. This amount can go up every year. High deductible policies have lower premiums, but if you get sick, your costs will be higher.

 

IMPORTANT** The basic benefits for plans K and L include similar services as plans A-J, but the cost-sharing for the basic benefits is at different levels. The annual out-of-pocket limit increases each year for inflation.

 

Medigap Plan Benefits 2007

 

   A  B  C  D  E  F  G  H  I  J  K  L
Hospital Coinsurance
Coinsurance for days 61-90 ($248) and days 91-150 ($496) in hospital; Payment in full for 365 additional lifetime days.
Part B Coinsurance
Coinsurance for Part B services, such as doctors’ services, laboratory and x-ray services, durable medical equipment, and hospital outpatient services.
50%* 75%*
 First three pints of blood 50%* 75%*
Hospital Deductible
Covers $992 in each benefit period
  50%* 75%*
Skilled Nursing Facility (SNF) Daily Coinsurance
Covers $124 a day for days 21-100 each benefit period
    50%* 75%*
Part B Annual Deductible
Covers $131.
                 
Part B Excess Charges Benefits
80% or 100% of Part B excess charges. (Under federal law, the excess limit is 15% more than Medicare's approved charge when provider does not take assignment; under New York State law, the excess limit is 5% for most services.)
          100%* 80%*   100%* 100%*    
Emergency Care Outside US
80% of emergency care costs during the first 60 days of each trip, after an annual deductible of $250, up to a maximum lifetime benefit of $50,000.
       
At Home Recovery Benefit
Up to $40 each visit for custodial care after an illness, injury, or surgery, up to a maximum benefit of $1,600 a year.
               
Preventive Medical Care
Up to $120 a year for non-Medicare covered physicals, preventive tests and services.
                   
100% of coinsurance for Part B-covered preventive care services after the Part B deductible has been paid.
Hospice Care
Coinsurance for respite care and other Part A-covered services.
                    50%* 75%*
Outpatient Prescription Drugs                        
*Out-of-Pocket Maximum Pays 100% of Part A and B coinsurance after annual maximum has been spent                     $4,140 $2,070

 

Plans A-L are standardized by the federal government. Not all plans may be available in your area. Consider the benefits offered by each plan and look for one that best meets your individual needs.

 

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