Apparently, the government funded medical insurance program Medicare comes at very nominal costs. Medicare Part A does not require a monthly premium and Part B has a small premium. However that is not all. Medicare beneficiaries know that there are a whole lot of other costs associated with Original Medicare plans. When you avail the Medicare benefits you have to pay deductibles, copayments or coinsurance. All added together can become a substantial amount.
Hence even though the premiums are absent or very less, the additional costs leave many seniors struggling with the expenses. So, many Medicare beneficiaries look for plans which cover those extra costs. Buying a Medicare Supplement plan provides the much needed relief, since these plans cover a large part of the Original Medicare expenses. These plans also provide extra coverage over what a member gets from Part A or Part B and some benefits which are not covered by Original Medicare at all. Hence these plans are also referred to as Medigap plans. These plans have to be purchased from private insurance companies which are authorized to sell such plans.
Medicare Supplement plans and Medigap plans work completely in different ways. Medicare Advantage plans, along with extra benefits also offer the benefits of Original Medicare. Medigap plans do not cover the benefits already provided under Part A and Part B. The benefits of these plans start after the Original Medicare benefits are exhausted. For example, most Medigap plans cover the full coinsurance of Medicare Part A and an additional 365 hospital stay days after Part A permitted days. Other subsidized or government-funded plans such offered by TRICARE, Veterans’ Benefits, long term insurance plans, health plans for Indians (urban and tribal) etc are totally different from Medigap plans and should not be thought to be of same type.
Features of a Medicare Supplement Plan
- You are required to have both the Original Medicare plans in order to buy these plans
- These plans have to be used with Original Medicare plans.
- You cannot have Medicare Advantage and Medicare Supplement plans together or use them together.
- You have to continue paying the premiums for Part B even when you buy Medigap plans
- One Medigap plan serves one individual only. Couples have to buy separate plans.
- Your insurance company is bound to renew your Medicare supplement plan irrespective of your health condition.
- The policy can only be cancelled by the company on the ground of non-payment of premiums.
- If you have a Medicare Medical Savings Account plan you cannot buy these plans.
- Some benefits that are not covered by Medicare Supplement plans are dental or vision care, long term care costs, eyeglasses, hearing aids and costs of private- duty nursing.
It is possible to switch from Medicare Advantage plans to Medigap plans and vice versa. However you need to be careful about the timing regulations for such changes in order to avoid penalties or being without coverage for some time. Many of the big insurance companies like Aetna, Humana, Liberty, Anthem, Mutual of Omaha, offer Medigap plans. You can also buy these plans through AARP which are issued by UnitedHealthcare. The State Health Insurance Assistance Program and the State Insurance Department supply relevant information regarding these plans.