One of the options a Medicare beneficiary has as a resource to tackle Original Medicare’s Coinsurance, Copays, and Annual Deductibles isthrough the use of a Medicare Supplement Insurance plan, also known as Medigap.
Medigap Plans are CMS-Approved insurance plans offered through private health insurance companies. Medigap plans can help pay some health care costs Original Medicare doesn’t cover, such as the 20% coinsurance, the inpatient hospital & skilled nursing copays, and the annual deductible. Medigap policies can also offer coverage for services that Original Medicare doesn’t cover. For instance, some plans will cover medical care when traveling outside the United States. Having Original Medicare and a Medigap policy, Medicare pays the 80% share of Medicare-Approved amounts, and the Medigap policy pays the remaining balance minus the expenses outlined in the specific plan the beneficiary is purchasing.
A Medigap policy is different from a Medicare Advantage Plan. That is to say, Medicare Advantage plans are an option to receive full Medicare benefits through private insurance companies. They provide predictable out-of-pocket costs with an annual maximum out-of-pocket exposure. In contrast, a Medigap policy supplements Original Medicare benefits. By selecting a Medicare Supplement Insurance plan, Medicare stays as your primary source of insurance, and by doing so, it has very distinct advantages and disadvantages, such as:
- Your Primary Insurance Is Medicare – There Are Absolutely No Networks To Adhere Too.
- If The Doctor, Facility, or Hospital Accepts Medicare, The Medigap Plan Must Also Accept.
- Can Make Supplement Coverage Changes Anytime Throughout The Year.
- There Is An Additional Monthly Premium Regardless Of Going To The Doctor or Not.
- Generally, The Monthly Premium Will Increase Every Year With Age.
- Part D Is Another Separate Plan With Another Separate Premium.
Medigap plans cost around $100 to $150 a month, depending on the plan chosen. Prescription Drug Plans cost around $30 to $70 a month, depending on the plan selected.
CMS = Centers for Medicare & Medicaid Services