You are turning 65. Learning the ins and outs of Medicare is confusing. Figuring out all of the options such as Medicare Advantage and Medical Supplements are even more confusing. You know Part A covers Hospitals and part B covers Medical. But you are not sure whether or not you need any other coverage in addition to Original Medicare. Why do many people purchase a Medicare Supplemental Plan and what does it cover?
To answer that question, you must first understand how Medicare Parts A & B work, and what is and is not covered. Medicare Part A covers most hospital expenses-but not all of those expenses. In 2011, there is a deductible of $1,132 per visit (as long as each visit is separated by more than 60 days). If you are in the hospital for 61-90 days, you’ll have a per day co-pay of $283. If you are in the hospital for 91-150 days, you’ll have a per day co-pay of $566.
Concerning Medicare Part B, there is an annual deductible of $162 (in 2011) that you are responsible for. In addition to that, you’ll be responsible for 20% of all medical expenses. This 20% can really, really add up. In addition to your regular doctor visits and tests, imagine if you would need a knee or hip replacement. That would require months and months of physical therapy-you would be obligated to pay 20% of all those bills.
While Original Medicare covers most medical needs, it was never meant to cover all of your medical costs. As you can clearly see, there are a lot of “gaps” in coverage, that you are responsible to pay. For this reason, many people will purchase a Medigap or Medicare Advantage plans in Texas. These two phrases-Medigap and Medicare Supplement are interchangeable-two names describing the same exact insurance. Most Medicare Supplemental Plans will pick up your Hospital deductible and co-pays, as well as your Part B deductible and the 20%.
For most people, it is being exposed to the 20% of medical bills that is the scary part. A battery of test could cost a small fortune. If you need physical therapy or rehabilitation, those twice a week visits, at 20% cost to you, really adds up. Add the potential Part A hospital deductible of $1,132-per visit, and you are looking at quite a medical bill. For this reason, most people want to fill in these gaps in coverage,
With a Medicare Supplemental plan, you are adding an extra monthly expense. However, the trade-off is that you will have a known expense, as opposed to a potentially very high expense if you utilize benefits.
If you have a Medigap plan in addition to your red, white, and blue Medicare card, this Original Medicare is your primary coverage. They pay your medical bills first. Then, your Medicare Supplement Insurance will pay the gaps (the deductibles/co-pays/co-insurance) that Medicare doesn’t pay for. And voila! If you have Original Medicare and a good Medicare Supplemental Plan, you now have complete, comprehensive coverage with little or no out of pocket expenses.
While Medicare pays for a lot of health care services, there are still many it does not cover. The Traditional Medicare Plan does not provide 100% coverage for medical expenses such as deductibles, co-payments, and co-insurance. Therefore Medigap was designed to help pay the costs that Medicare does not cover. Medigap is also referred to as ‘Medicare Supplement Plans.’
What is Medigap and how does it work?
Medigap is additional health care insurance provided by private insurance companies to cover the gaps in the Medicare Plan. Medigap policies are regulated by Federal and State Laws in order to protect you as a beneficiary. Medigap policies have to be clearly labeled as “Medicare Supplement Insurance”, and the policies are standardized for each State.
Medigap Eligibility Requirements
Medigap coverage works only in conjunction with a Medicare Plan. Typically, you must have Medicare Part A and Part B in order to be eligible for Medigap. Acceptance of your application is guaranteed if you are 65 or older and apply within six (6) months of your initial enrollment in Plan B of Medicare. Under certain circumstances pre-existing conditions might be waived. Please ask us for specific details. As Medigap policies only cover one person per policy you and your spouse must each purchase separate policies.
In some states, you may be able to select from up to 12 different standardized policies (Medigap Plans A through L). Each plan offers a different set of basic and additional benefits and is the same for every insurance company. Each Insurance company can decide which policies they want to sell and set their own prices, so research carefully in order not to overpay.
Medigap policies no longer cover prescription drugs. You cannot have both Medicare Part D and Medigap drug coverage at the same time. If you have a Medicare Prescription Drug Plan (Part D) and a Medigap policy that covers drugs, then you need to tell your Medigap insurance provider to remove the drug coverage from your policy. While Medicare Part D coverage is more beneficial than Medigap drug coverage, you can also decide to keep your Medigap policy with prescription drug coverage instead.