What is Medicare Gap Coverage?
Today, many individuals are enrolled in the Original Medicare program in order cover their medical expenditures. What many are unaware of is the fact that, while Parts A and B will help you to pay for many medical bills, this program is insufficient to cover all medical expenses.
At this point, you should investigate enrolling in Medicare Supplemental Insurance, also known as Medigap coverage. This article will investigate how these supplemental policies may be the right healthcare insurance solution for you.
Where it helps most
Medigap coverage will help to cover medical costs that Original Medicare Parts A and B do not address, such as copays, deductibles, and coinsurance. Another great benefit of Medigap policies is that if you have to travel outside the country for any reason, you will still be insured. Original Medicare policies, both Parts A and B, don’t cover you if you’re traveling. So, you should always have coverage that will be with you, in case of an emergency.
Because it only covers an individual, your partner or spouse will need to purchase their own policy. Private insurance companies manage the sale and maintenance of these policies in order to assist individuals in seeing to their medical needs. These policies are not officially affiliated with the federal insurance programs. As such, the companies that offer them are still required to provide a standard of coverage comparable to that offered by the official programs.
The private nature of this insurance coverage benefits you as a consumer because, while the coverage levels must be standardized, these carriers still compete with one another for your business. They vie to provide superior levels of customer service, better monthly premiums and other aspects that may render their offerings more appealing to a wide range of consumers. State insurance departments provide oversight for the companies that offer these policies. But you must still select the particular offering that works best for your particular needs.
Medigap past and future
Before June 1, 2010, these gap insurance policies were often standardized in the following ways. State departments permitted up to 12 different programs. Supplemental Medicare, Plan A, offered a basic level of gap coverage. Plans B – L offered increasing levels of coverage and incentives to consumers. This was designed to facilitate the selection of the most appropriate policy on an individual basis. The caveats to this structure were Massachusetts, Wisconsin and Minnesota, which structured their supplemental offerings in a different way.
After June 1, 2010, the various types of supplemental offerings changed. In addition to two new plan options – M and N — with low deductibles and greater cost sharing, several plans were eliminated. Options E, H, I, and J were no longer available to newly enrolled consumers. But if an individual already had any of these plans prior to June 2010, they were permitted to keep and renew them. The downside to remaining with any of these particular packages was that they would become increasingly expensive, due to lack of new enrollees.
That means that, after 2010, a total of 11 plans were available to consumers—Plans A, B, C, D, F, High-deductible F, G, K, L, M and N (see table below). Individuals were advised to familiarize themselves with the offerings of each of the plan types and select the one that served their individual health needs and budget requirements best.
Once they’d established this base criterion, they were told to familiarize themselves with the various plan structures offered by different companies. This enabled them to select the company that provided the most desirable perks for their needs. This gap coverage was only available to individuals who were already enrolled in the Original Medicare plan, Parts A and B. Those who purchased the Medicare Advantage (Part C, or MA) plan would be required to drop the Advantage coverage and reenroll in the Original plan.
Calculating the costs of Medigap coverage
While it might seem counterintuitive, the premiums charged for the same plan will vary from company to company. That’s because even though the levels of care are standardized, insurance companies competitively price their plans and offer incentives to consumers to buy in with them. Additionally, as you age, your premiums may increase, even if you stay with the same plan. This understanding should factor into your choice of plan and provider.
MedicareEnrollment.com allows you to obtain the best resources for enrollment. But it also provides you with options to make sure that you have the very best coverage in place, moving forward.
Some important considerations with Medigap
You will be required to pay a sum of money for your Original Medicare plan. But your monthly premium for your supplemental Medicare must be paid to the private insurance carrier of your choice. However, one of the main benefits of this type of policy is that, even if you have health issues, the private insurer cannot refuse to renew your policy.
Prior to 2006, these supplemental plans often offered coverage for prescription drugs. However, gap coverage no longer includes this aspect of medical care. If you desire prescription coverage, you must enroll in the Medicare Prescription Drug Plan, Part D. It’s also important to understand that, even though gap coverage is intended to cover the areas of your care that Medicare doesn’t, it isn’t a total solution. Often, Medicare Supplemental policies won’t cover: vision and dental care, long-term care, in-home care by a private duty nurse and eyeglasses or hearing aids.
If you decide to drop your gap coverage, you should carefully time your choice. And, you should carefully consider precisely what you want to accomplish. A good example is when an individual decides to switch to a different Medigap policy or drop their gap coverage and enroll in a Medicare Advantage program, since the two are not compatible. You should also keep in mind that if you drop your gap coverage policy and go more than 63 days before your new policy is activated, you will be charged a penalty. This is also called a late enrollment fee.
Programs that aren’t Medicare
Because gap coverage policies are intended to interact with government insurance plans, they are also subject to some restrictions. There are a number of policies out there that either restrict individuals from enrolling in gap coverage or are frequently mistaken as gap coverage themselves. If you’re considering a supplemental policy, you should be aware of these plans. You should have all your data before you enroll in any program or policy, as well.
Some of these programs include Medicare Advantage—which operates like an HMO, PPO or Private Fee-for-Service (PFFS) Plan—Medicaid or Medicare prescription drug plans. Other programs that do not fall under the support of these affiliated gap coverage plans are: Veteran’s Benefits, Union Employee programs, such as the Federal Employees Health Benefits Program (FEHBP), TRICARE, Indian Health Service (HIS), Tribal and Urban Indian Health Plans and long-term care plans.
Enrolling in a Medigap program can significantly reduce your out-of-pocket medical expenditures. But it’s important to understand that it isn’t a complete solution, in spite of what the name implies. When considering any of these options, you should educate yourself about the various offerings of different providers. This not only ensures that you receive the highest-quality care. And, it allows you to obtain the care options that are most applicable to your needs.
Gap coverage is something that can assist those who are still active and largely self-sufficient. But it doesn’t apply to long-term care needs. So, if you come under this heading, it is vital that you seek a Medicaid or other Medicare policy that will address this consideration.
Understanding what gap coverage is and what your options are when dealing with a private insurance company will enable you to adjust your preparations for care accordingly. If you have any prescription drug needs, enrolling in the Medicare Prescription Drug Plan, Part D at the same time you are considering your gap coverage options may be advisable. Additional considerations, such as vision and dental care, should also factor into your decisions and the steps you take to ensure you are covered.
Should you have any additional concerns or require clarification of any point discussed here or by your prospective insurance providers, there are several sources of information that will prove helpful. Reviewing an actual Medigap policy can sometimes clarify any unclear points.
However, if you still require assistance, your State Health Insurance Provider (SHIP) and your State Insurance Provider are in place to assist you. It is an explicitly stated aspect of their function to assist state residents with any questions or concerns they have about these insurance options. Your health and your healthcare are important issues in your life. It’s important that you arm yourself with information of the highest caliber in order to make the choice that serves your particular needs.