What are Medicare Supplements (Medigap)?
Medicare Supplements are additional insurance policies that Medicare beneficiaries can purchase to cover the gaps in their Original MedicareOriginal Medicare is private fee-for-service health insurance for people on Medicare. It has two parts. Part A is hospital coverage. Part B is medical coverage. (Medicare Part AMedicare Part A is hospital coverage for Medicare beneficiaries. It covers inpatient care in hospitals and skilled nursing facilities. It also covers limited home healthcare services and hospice care. and Medicare Part BMedicare Part B is medical coverage for people with Original Medicare benefits. It covers doctor visits, preventative care, tests, durable medical equipment, and supplies. Medicare Part B pays 80 percent of most medically necessary healthcare services.) health insurance coverage. Dubbed Medigap by the federal Medicare programMedicare is a federal health insurance program for people ages 65 and older and people with certain disabilities., these policies help pay some of the deductiblesA deductible is an amount a beneficiary must pay for their health care expenses before the health insurance policy begins to pay its share., copaymentsA copayment, also known as a copay, is a set dollar amount you are required to pay for a medical service., and coinsuranceCoinsurance is a percentage of the total you are required to pay for a medical service. shared costsAn amount patients pay for their share of the cost of medical service or supply, like a doctor’s visit, hospital inpatient visit, or prescription drug. that are built into Medicare.
In all but three states, Medicare supplements are standardized into 10 lettered Medigap plans (A, B, C, D, F, G, K, L, M, and N). Each lettered plan, regardless of which insurance carrier offers it, has the exact same benefits. So if you buy a Plan F policy from AARP, for example, it will have all of the same features, benefits, and coverages as a Plan F policy from Aetna, Blue Cross Blue Shield, etc.
The only difference Medicare supplement insurance companies can make to their policies is the monthly premiumA premium is an amount that an insurance policyholder must pay for coverage. Premiums are typically paid on a monthly basis. In the federal Medicare program, there are four different types of premiums. , how they calculate the monthly premium, and the premium increases.
Also, because supplemental Medicare insurance is not health insurance (it is a form of indemnity insurance), insurance carriers are not obligated to sell a policy. The only obligation to sell a policy is when a Medicare beneficiaryA person who has health care insurance through the Medicare or Medicaid programs. has a guaranteed issue rightGuaranteed-issue is a right granted to Medicare beneficiaries and applies to Medicare Supplement insurance (aka, Medigap plans). All states and the federal government enforce this essential right, which protects Medicare beneficiaries from medical underwriting., which, for most people, only happens when they turn age 65.
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