How Medigap works with Medicare can be found in its name
Medigap is another name for Medicare supplement. Many people start with an erroneous understanding of how Medigap works. This is further compounded by making the incorrect assumption that Medicare Advantage plans are also Medicare supplements.
Watch the following video to see how Medicare and Medigap work together to offer you better protection.
Since Medigap fills in the gaps or supplements Medicare, it’s important to have a solid understanding of Medicare itself.
Original Medicare is composed of two parts.
- Part A – Inpatient Care
- Part B – Outpatient Care
Part D is not part of original Medicare and is actually optional.
Parts A and B do not offer 100% coverage. You are subject to deductibles and coinsurance. You’ve probably heard of the dreaded 20%.
Part A Costs for 2013
- Inpatient deductible – $1184 covers days 1 -60
- $296 copayment for days 61-90
- $592 copayment for days beyond 90
Most people receive Part A without paying a monthly premium.
Part B Costs for 2013
- Deductible – $147 (Some preventative services available at no cost)
- 20% coinsurance for covered services.
Most people pay a monthly premium of $104.90 but premiums can be as high as $335.70 as they are based on annual income.
As you can see, there are some pretty large gaps in how much Medicare pays for covered services.
What is Medigap?
First, the terminology. You will hear Medigap referred to as a Medicare supplement, Medicare supplemental insurance or just supplement or supplemental. They all mean the same thing.
The one plan that is not a supplement is a Medicare Advantage plan. This is a completely different type of plan.
Medigap is insurance available from a private insurance company designed to help pay your share of covered expenses.
The gaps filled are monetary and not service related. A supplement is not generally offering any additional benefits not included in original Medicare.
If you have heard of plans which include, dental, vision, hearing alternative health care (like acupuncture) and transportation, these are more than likely Medicare Advantage plans.
Paying for a Medicare Supplement
Medicare supplement premiums can vary widely. There are several standardized plans available and countless insurance companies offering such plans.
Premiums will be based on your individual circumstances and you must continue to pay your Part B premium.
As with any type of insurance, premiums will often increase over time.
This basic overview of how Medigap works should give you some idea as to whether a Medigap policy is right for you.