What Is Medigap Insurance?

The elderly and disabled of the United States have access to Medicare, a comprehensive, federally administered health care program. While most find it affordable, there are many costs associated with it such as coinsurances, premiums, deductibles, and depending on a particular consumer’s needs, not all services may be covered. In order to help consumers round out their health care, the federal government worked with private plans to create Medigap policies.

Definition

Medigap plans are a supplemental insurance policy that are made to work with Medicare. These are private health plans that help pay for some of the additional costs associated with traditional Medicare, such as coinsurance. Medigap policies will also sometimes provide coverage during deductible periods, and depending on which plan a consumer purchases, it may also provide benefits that traditional Medicare otherwise does not cover.

Enrollment

There are limited times in which a consumer is guaranteed the right to purchase a Medigap under federal law without the Medigap denying him for coverage or delaying coverage of pre-existing conditions, which is called a “guaranteed issue right.” When the consumer is 65 or older, he is guaranteed the right for six months after his 65th birthday or the month he first enrolls in Part B during his initial enrollment period. Consumers over 65 may also be guaranteed the right to sign up for a Medigap if they lose qualified health coverage. In this case, they have 63 days to sign up for a Medigap. Those under 65 are not guaranteed the right to purchase a Medigap under federal law. Different states have varying laws on Medigap purchasing rights.

Covered Services

According to federal regulations, all Medigap policies must cover a minimum of an additional year of hospital coverage (365 days), coverage of the hospital coinsurance, coverage for Part B services, and it must cover the first three pints of blood needed each year. Other plans cover additional benefits at an additional price, including skilled nursing facility coinsurance, the Part A and Part B deductible, and the Part B excess charges (the charge that a consumer must pay if a doctor does not take the Medicare price for a service).

Before June 1, 2010

Policies purchased before June 1, 2010 had slightly different benefits and coverage. They were labeled A through L. If a consumer purchased a plan before this date, then he should continue to receive coverage just the same. Plans E and J offer $120 preventive health care screenings each year and plan D, G, I and J have an at-home recovery benefit.

After June 1, 2010

Due to changes made by the National Association of Insurance Commissioners in 2010, plans E, H, I, J and high-deductible plan J are no longer offered on the market. They are no longer offered because several benefits, including the preventive care and at-home recover benefits were eliminated. Without these benefits, these plans were duplications of other plans offered. The changes included the addition of new Medigap benefits, including a hospice benefit to all plans which pays the 5 percent coinsurance for prescription drugs and respite care charged during a hospice stay. Two new Medigap plans were also introduced to the market, plans M and N, which now cover emergency care when traveling overseas.