Medicare offers up to 80 percent of healthcare coverage. But shouldering the responsibility of that remaining 20 percent will hurt you as you get older and need more coverage. That’s where a Medigap insurance plan helps. Sometimes called Medicare Supplement Insurance, these plans are meant to supplement Original Medicare (i.e Parts A and B) and are designed to fill its gaps. Medigap plans are sold by private insurance companies and consist of 11 standardized Medigap plans, each assigned a letter from A to N. Of these, Plan F is very popular since it entails high coverage with a higher premium. A plan F entails no deductibles, no copays, and no bills after patients leave the hospital. Here are six factors you must consider when looking for a Medigap policy.
Unlike Medicare Advantage, you can’t replace Original Medicare with a Medigap policy. It’s designed to supplement Original Medicare so you still have to continue paying monthly premiums on Parts A and B. Your premiums for a Medigap policy go the private insurer.
Your policy is guaranteed renewable. This will come as a huge relief if you suddenly develop an illness. Unlike most insurance policies, you’re not at risk of having the insurance company cancel your policy.
One significant gap in Original Medicare is that it doesn’t provide coverage for prescription drugs. Medigap policies also don’t cover this. You’ll need to purchase Medicare Plan D if you want to address this gap. This means paying separate premiums for A, B, D, and your Medigap policies.
Another huge disadvantage is that unlike Medicare Advantage, Medigap insurance does not cover dental or vision care. Consider alternative options like a Dental Savings Plan if you require help paying for these services.
Benefits of Plan G are set by Medicare, so your private insurer cannot manipulate or change these benefits. Use the quality of the insurance company and the price of the plan as the criterion in choosing a plan. However, if you live in Massachusetts, Minnesota, or Wisconsin, Medigap plans have a few differences.
The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) has cut off access to Medigap Plan C and F for seniors who turned 65 after January 1, 2020. Buyers can purchase Plan D and Plan G instead which cover all the same out-of-pocket costs, except for the Part B deductible coverage.