Your original Medicare insurance covers a wide variety of health services, from flu shots to hospital stays and hospice care. But it doesn’t cover everything, and it doesn’t cover all of your out-of-pocket costs.
Many services covered by Original Medicare require co-payments, coinsurance and deductibles. You can purchase extra insurance to cover these gaps in Medicare, such as Medicare Supplement Insurance or Medigap. Some Medigap policies also provide coverage that Original Medicare doesn’t, like emergency care in a foreign country.
You have to pay for Medigap, which is sold through private insurance companies. You can purchase it only if you are enrolled in Original Medicare, not Medicare Advantage, which is managed care provided by private insurers.
Every Medigap policy must follow federal and state laws designed to protect you. Insurance companies may sell only a standardized Medigap policy identified in most states by the letters A through N. Each standardized policy must offer the same basic benefits, no matter which company sells it.
Beware when you’re shopping for a Medigap policy. Cost is usually the only difference among the policies with the same letter sold by different companies. There can be large differences in how much various insurers charge for the same coverage.
Medigap policies often cover the following costs.
• Medicare Part A (hospital) coinsurance and hospital costs for up to 365 days after Medicare benefits expire.
• Medicare Part B (medical) coinsurance or co-pays.
• Part A hospice care coinsurance or co-pays.
• Skilled nursing facility coinsurance.
• Part A and Part B deductibles.
Medigap policies generally do not cover long-term care, vision or dental, hearing aids, eyeglasses or private-duty nursing.
The best time to buy a Medigap policy is during your Medigap open enrollment period – the six months beginning on the first day of the month in which you are 65 or older and enroll in Medicare Part B.
Why is this important? Because during open enrollment, an insurance company can’t refuse to sell you any Medigap policy it offers due to health problems, nor can you be charged more based on your health status.
In some cases, however, an insurer can refuse to cover your out-of-pocket costs for pre-existing health conditions for up to six months. After six months, the Medigap policy will cover the pre-existing condition.
For Medicare-covered services, Original Medicare will cover the condition even if the Medigap policy won’t cover your out-of-pocket costs. But you are responsible for the coinsurance or co-payments.
Mind the Medigap
A few other points:
• You must have Medicare Part A and Part B to purchase a Medigap policy.
• Plans E, H, I and J are no longer for sale, but you can keep them if you already have them.
• A Medigap policy covers only one person. If you and your spouse both want coverage, you must each buy a separate policy.
• Any standardized Medigap policy is guaranteed renewable, even if you have health problems. This means that the insurance company cannot cancel your policy as long as you pay the premium.
Although some Medigap policies sold in the past cover prescription drugs, policies sold after Jan. 1, 2006, are not allowed to include prescription drug coverage. To obtain that coverage, you can join a Medicare Part D Prescription Drug Plan, offered by private companies that Medicare approves.
David Sayen is Medicare’s regional administrator. For more information, visit medicare.gov.