Medigap, also known as Medicare Supplement Insurance, is not a government-sponsored program.  Rather, it is a series of products offered by private insurance carriers providing supplemental insurance to the Medicare program.  As the name implies, it covers the “gaps” for deductibles, co-insurance, and other charges not covered by Medicare.  To be eligible to elect a Medigap policy, an individual must be enrolled in Medicare Parts A & B.

 

The government has defined twelve standardized plans to simplify Medigap coverage.  These plans are lettered A through L.  With the exception of Massachusetts, Minnesota, and Wisconsin, which have made some modifications to the Medicare defined plans, all other states offer Medigap plans A through L as defined by Medicare.  However, as in any privately marketed product, the number of plans offered in a state, as well as the premiums for them, can vary.

 

Every Medigap plan A through J must include the following basics:

• The Medicare Part A co-insurance for days 61-90 and days 91-150 of a hospital stay

• Coverage of up to 365 additional days of a hospital stay during your lifetime after you use up all Medicare hospital benefits

• Co-insurance or co-payment amount for Medicare Part B services after you meet the yearly deductible

• The first three pints of blood or equal amounts of packed red cells per calendar year

In addition to the basic benefits, Plans A-J offer some additional benefits depending on the plan selected.  These may include skilled nursing facility co-payments, Medicare Part A and Part B deductibles, foreign travel emergencies, some preventive care, and some additional, at-home recovery.

 

With the addition of the Medicare Prescription Drug Program in 2006, Medigap plans that had previously offered some prescription drug benefits are no longer allowed to offer them to new enrollees. In addition, Plans K and L have been added to the Medicare defined standard Medigap plans. These plans differ somewhat from the original 10 plans in their basic benefits.  Plans K and L have lower premiums but higher out-of-pocket annual limits before paying 100% of co-insurance and co-payments. (In 2007, Plan K has a $4,000 annual out-of-pocket limit, while Plan L has a $2,000 limit.)  As part of the basic benefits, they pay a percentage rather than the full Medicare Part B co-insurance and co-payments for most services until the annual out-of-pocket limits are met. They do, however, provide 100% of the co-insurance for Medicare preventive services and a percentage of the hospice cost sharing for all Medicare Part A covered expenses and respite care. It is important to note that “excess charges,” which are charges above what Medicare approves, are not covered and do not count toward the out-of-pocket-limit. 

 

An individual may enroll in any Medigap plan during his or her open enrollment period.  The open enrollment period begins the first day of the month in which a person is 65 and is enrolled in Medicare Part B.  During this open enrollment, an insurer cannot deny an individual a policy based on pre-existing conditions or charge more because of them.

 

If an individual has a Medigap plan and decides to drop it, it is likely that he or she will not be able to re-enroll at a later date.  However, if the person moves out of the service area or the company selling the Medigap plan doesn’t renew its contract with Medicare, the person would have the right to re-enroll.

 

If a person is enrolled in a Medicare Advantage Plan (see next section), he or she does not need a Medigap plan and can generally not use one. 

 

 

To find out what policies are available and who the providers are in your state, contact your state’s Insurance Department.  For information to assist you in determining which Medigap plan might be right for you, contact your State Health Insurance Assistance Program (SHIP).  These numbers can be found by going to www.medicare.gov.  Scroll down the page and click “Find Helpful Phone Numbers and Websites.”  Then click on “Related Websites” to reach SHIP.  Search by organization and state to obtain contact information.