Medicare Supplement (MEDIGAP)

A Medicare Supplement (or “Medigap Plan” as it is commonly referred to) is a form of secondary insurance, which supplements or absorbs most if not all of the balance of medical bills after the primary insurer (Medicare) pays their portion, which on average, is about 80%. Medicare has what we refer to as “gaps” which are the recipient’s responsibility. The Medicare gap includes such things as deductibles plus a 20% balance on services provided. Medicare Supplement insurance “fills in the GAPS” of Medicare and pays these amounts - hence the alternate name “Medigap”.

Supplemental insurance, as well as Medicare, is a nationwide program. Insurance companies provide options to “fill in Medicare’s gaps” from a group of 12 Medicare approved plans. These plans are lettered A through J, plus newly added cost sharing K & L plans. Companies do not have to offer and sell all 10-12 plans in each state, however, if you purchase a plan in one state your coverage is “portable” and accepted, no questions asked nationwide. This coverage continues even if you move - and the company does not “sell” that plan in the new state.

Important detail to keep in mind is that plans of any same letter contain exactly the same benefits, area-to-area, company-to-company - but - they can vary in cost. For example, one company may offer plans A, B, C, D & F, while another company might only offer A, B, C, and G in a given state. A consumer could call both companies and ask the price of their plan “C”. The benefits in the plan “C” are identical however; the prices between companies could vary greatly. It is the gallon of milk theory – two different convenience stores could charge two prices for the same gallon of vitamin D milk. This makes it much easier for consumers to shop around. It is the same product; therefore, it is actually company stability, ratings, and plan pricing that are the factors that one would base their comparisons on.

Again, Supplemental coverage is nationwide and used for any doctor, hospital or medical facility where Medicare is accepted. You must present two cards when you are about to have medical services provided, your Medicare card (primary insurer) and your insurance card, (secondary insurer). It works like this: Medicare reviews medical claims, decides if they are acceptable medical charges and then pays 80% less deductibles which have to be met by either the insurer or the recipient. From that point Medicare notifies the recipient and the doctor or provider what the allowable billing amount is and submits balances to your supplemental company in order for them to process the charges and have payment submitted to the doctor or provider.

*If Medicare approves a charge - the supplemental coverage you choose must pay their portion, no questions asked. If Medicare denies a claim then your supplemental coverage cannot pay out. They work hand in hand.

Supplemental plans are available to any Medicare recipient enrolled in Parts A & B of Medicare. You pay your monthly Medicare Part B premium in addition to any additional premium the Supplemental company charges. You can purchase Medigap coverage during “open enrollment” (first time enrolling in Part B of Medicare) with no medical questions asked or once enrolled you are in Medicare A & B at any time if health allows and an individual can pass medical questions. Once a supplemental plan (any letter) is purchased one would also be able to switch to any other company or plan at any time during the calendar year unless certain medical conditions prevent the change. This allows the insured to maintain the flexibility of shopping for the most affordable rate for a given plan in any given area while maintaining the level of medical coverage that is comfortable. Having a Medigap policy also allows you the option of choosing a Medicare Part D Prescription Plan that caters to your specific needs. This can be a completely separate company from your Supplemental provider. One would not affect the other.Along with Medicare as the primary insurer, the right Medicare Supplement plan can be the most flexible portable, medically comprehensive plan for a Medicare recipient that is currently available on the market today. However, costs can be a factor and supplemental rates, as well as any other form of insurance, usually increase annually. As long as health allows, regular comparison-shopping is a recommended option.