Have you ever started researching your Medicare options and found yourself singing the Alphabet Song?
There’s probably a reason. Medicare itself is named alphabetically, and to make it worse, there are Medicare supplement plans called Medigap with a whole alphabet unto themselves! What is Medigap? What’s the difference between Medicare Part A and Medigap Plan A?
This can be a daunting subject, but don’t worry; we’re going to break it down piece by piece and make it easier to understand. So to kick off, let’s start by talking about what Medigap, also called Medicare Supplement Insurance, is.
A Medigap policy is a private health insurance policy that you purchase to supplement your Medicare coverage and fill in the “gaps” that Medicare doesn’t take care of. Medicare doesn’t cover all of the costs of your medical care, and depending on the care you need, the gap between your bills and what Medicare will pay could be large.
For instance, you must pay deductibles under both Medicare Part A and B, and these could be high; for Part A, it is $1,288 for each hospital stay per benefit period — in other words, separated by more than 60 days. If a hospital stay lasts longer than 60 days, you must pay $315 coinsurance per day. And after 90 days, you don’t have coverage at all, unless you choose to use one of your 60 “lifetime reserve” coverage days. These reserve days allow you to elect to receive regular Medicare coverage even outside of a benefit period, but they are limited — you only get 60 for your lifetime.
Then there are the issues that the Original Medicare program doesn’t cover at all — treatment by out-of-network doctors while you’re traveling within the U.S., for instance, or treatment in a foreign country. Basic medical devices like hearing aids are another issue. Not only does Medicare not cover them, it doesn’t even cover hearing exams. Active people may have medical needs that simply aren’t accounted for in the Medicare program.
Medigap policies can help bring peace of mind. To figure out which one is right for you, you should contact Nationwide Life Plans and talk to a licensed agent who will assess your lifestyle and your medical needs and make recommendations. But to give you an idea, let’s take a brief look at your Medigap options below. (Remember: they’re all named by letter, just like Medicare plans, so watch out. Medicare Part A and Medigap Plan A are not the same thing!)
Plans A and B. These plans offer moderate premiums and lower out of pocket costs for you. They provide basic coverage for things like hospital stays, medical expenses and hospice care. The basic difference is that, while they both cover the same things, Plan B also covers your Medicare Part A deductible.
Plan C. This plan covers co-insurance costs for basic Medicare benefits, but also allows for skilled nursing care, some Medicare Part A and B deductibles, and emergency care outside of the U.S.
Plan D. This plan covers Part A and B coinsurance, Part A deductibles, as well as skilled nursing care and emergency care outside of the U.S.
Plan F. Plan F covers all basic benefits, Medicare Part A and B deductibles, skilled nursing care, and emergency care abroad, in addition to 100% of Part B coverage’s. It also offers a high deductible option to help lower your premiums.
Plan G. With moderate premiums but low out-of-pocket expenses, Plan G offers basic benefits, coverage for additional costs like Medicare Part B excess charges — charges above what Medicare pays — and any emergency medical costs incurred outside of the U.S.
Plans K and L. These plans keep premiums low, but have higher out of pocket costs, which are subject to annual limits to protect you. They cover a wider range of medical cost, including doctor visits and hospital stays. Plans K and L pay a portion of costs like coinsurance and deductibles (usually 50% and 75%, respectively), but you are responsible for the remaining portion.
Plans M and N. Offering lower premiums and moderate out of pocket payments for doctor and ER visits, Plans M and N cover the same basic benefits as the others as well as covering costs for the Medicare Part A deductible, skilled nursing care costs, and emergency care outside of the U.S. Plan N covers your Part A deductible, while M covers only 50% of it.
For more information on Medigap plans, it’s a good idea to read up on them on the Medicare website. It’s got great information and a couple of graphs that let you compare all Medigap plans side by side.