Medicare Supplement “Medigap” Insurance Policies

Do you think that Medicare will cover all your medical expenses? If so, think again. Medicare does not cover all treatments or procedures. It also requires you to pay premiums, deductibles, and copays. This can be a huge financial burden, especially for those with lower incomes. There are Medicare Savings Plans (MSPs) for those with extremely low incomes. These can help cover the costs of premiums, co-pays and deductibles. But not everyone qualifies for MSPs. What do those folks do to cover their out of pocket health care expenses that are not covered by original Medicare? The answer is that these folks often purchase Medigap or Medicare Advantage Insurance policies. In this article we will share some information about Medigap policies.

Medigap policies are private health insurance policies that are regulated by the federal government and sold to fill “gaps” in original Medicare, also known as Medicare Parts A and B. These gaps include most copays, coinsurance costs, and deductibles. However, as of January 1, 2020, Medigap policies sold to those new to Medicare, are not allowed to cover the Medicare Part B deductible.  If you already have a Medigap policy that covers your part B premiums you may keep that plan. Medigap policies also offer some coverage not available under original Medicare. This includes services such as medical care when you travel outside of the United States. 

So how do Medigap policies work? The answer is simple. Medigap policies are a supplement to your existing Medicare coverage. This means that, if you have medical costs, original Medicare will pay its share of the costs (in other words, the Medicare approved amount for covered health care costs), then your Medigap policy will kick in and pay its share. For example, if you had a $100,000 medical procedure and Medicare only covered $80,000 of the costs, Medicare would pay that portion, then your Medigap policy would pay its share, which could be the remaining $20,000. You might be required to pay some of the costs such as co-pays, deductibles, and co-insurances. 

To purchase a Medigap policy, you must already have original Medicare. Once you purchase the policy, you can keep it for as long as you want, so long as you pay the policy premiums. This means that your Medigap provider cannot cancel it for any reason, not even a preexisting health condition, so long as you pay the premiums. However, your Medigap policy only covers you. If you have a spouse or other family member that wants Medigap coverage, he or she will have to purchase it separately. Additionally, Medigap policies do not cover prescription drugs. You should also consider purchasing a Medicare Prescription drug plan to cover your prescription costs. 

So, there you have it. A few quick facts about Medigap policies. If you want to learn more about Medigap policies or about health benefits in general, reach out to Benefits in Action at 720-221-8354 or Counselors can answer your questions about health benefits for which you may be eligible. And be sure to read next month’s edition of PrimeTime Seniors, when we will discuss Medicare Open Enrollment. Until then, stay safe.

Benefits in Action is a nonprofit organization providing education, navigation, and application assistance for health care and health related benefits including Medicare, Medicaid, Connect for Health Colorado, SNAP, dental care, and more.

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