Medigap Insurance Explained

Medigap insurance is any private insurance policy that provides coverage to Medicare beneficiaries, covering medical expenses that Medicare either doesn't cover, or does not cover in full. While they are sold by private insurance companies, they are regulated by the federal government and must follow state and federal laws. Medigap insurance can be broken down into 12 standard policies. Each policy is designated with a letter and has it's own unique features and benefits. In order to determine which policy works best for you, you must carefully review all policies to find the one best suits your needs.

Medigap Insurance Requirements

In order to qualify for Medigap insurance, you have to be enrolled in Part A and B Medicare. You will need to pass medical screening, and you may need to obtain a statement from your attending physician. You are exempt from that requirement if you are 66 or older, or if you've been 65 for more than six months. The Medigap insurance covers you and you alone, so you  and your spouse will need to buy Medigap insurance separately.

Old Medigap Insurance vs New Medigap Insurance

On June 1, 2010, several aspects of Medigap insurance was changed. The changes affect you if you buy Medigap insurance after May 31, 2010. If you who bought Medigap insurance before May 31, 2010, the old rules still apply.

What Old Medigap Insurance Covers

All Medigap insurance policies cover your hospital costs that aren't fully covered by Medicare Plan A, as well as all preventative care under Medicare Plan B. Policies A-J do the same for non-preventative services under Medicare Plan B. Policy K covers up to 50 percent of remaining Plan B costs, blood work, hospice care, skilled nursing facility care and Medicare Part A deductible. Policy L covers up to 75 percent of the same costs. Policies C-J cover full costs of skilled nursing facility care and some foreign travel emergencies. Policies B-J cover Medicare Part A deductible in full, while Medicare Plan B deductible is covered in full by policies C, F and J.

Plan B Medicare Excess charges are covered in full under policies F, I and J, while policy G covers up to 80 percent of the charges. Policies D, G, I and J cover at home recovery, while policies E and J cover up to $120 worth of preventative care costs not covered by Medicare. Policies F and J are high-deductible policies. That means that their benefits don't kick in until you pay up to $2,000 in Medicare costs.

What New Medigap Insurance Covers

Under the new law, policies E, H, I, and J are no longer sold to new customers. Hospice care is now covered by all policies.  Policies A-G and M-N cover it in full while policies K and & cover up to 50 percent and 75 percent, respectively. At-home care is no longer covered by any policy. 

Medicare Plan A hospital cost benefits have been extended to cover up to 365 days after your Medicare benefits are used up. Policy G now covers Medicare Plan B excess charges in full. The newly introduced policy M covers your extra Medicare Plan A hospital costs, Medicare Plan B benefits (including preventative care), blood work, skilled nurse facility care, foreign travel emergencies in full and up to 50 percent of Plan A deductible costs.

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