Medigap Supplemental Insurance

Medigap supplemental insurance covers the gaps between what medicare pays for medical treatment and what hospitals and doctors actually charge. It is sold by private insurance organizations and is not sponsored by the US government.

Medicare will pay for many of your medical treatments but it will not pay 100% of your costs. You will need to purchase extra insurance to cover out-of-pocket costs. These costs typically include the Medicare part B annual deductible and the hospital and doctor co-payments. Medigap supplemental insurance can cover most of the co-insurance, deductibles and co-payments that Medicare part A and B do not pay for.

Before you buy this insurance, you need to be currently enrolled in Medicare parts A and B. You are ineligible if you are younger than 65 or currently have a managed medical plan such as a PPO, PFFS, HMO or Medicaid. If you want to cancel your present insurance and get Medigap supplemental coverage you are required to apply 60 days before your current policy ends. Alternatively, you will have up to 63 days after your insurance ended to buy supplemental insurance.

You should purchase Medigap insurance and Medicare part B at the same time. When you enroll in the part B plan, you will be given a 6-month “open enrollment” time to buy any of the Medigap plans. You only get an enrollment period once.

The insurance company is not allowed to decline your application, make you pay any additional costs for pre-existing health conditions or delay when your coverage starts.

Twelve plans are offered including A to L. On June 1 of 2010, E, H, I or J plans will not be available anymore. If you have an E, H, I or J policy you can renew it. Medigap will provide 2 new plans called M and N after May 31st, 2010.

Medigap supplemental insurance plans are standardized. Every plan is required to comply with state and Federal laws and will operate only with your original Medicare insurance. The supplemental insurance needs to offer the identical primary benefits. This coverage should include all or a good portion of your hospital outpatient co-payments, deductibles and Medicare policy’s coinsurance.

Medigap plans are sold through state insurance companies. However, the insurance companies might not provide all of the plans. You can contact your state’s State Health Insurance Assistance Program for information on what Medigap policies are offered by the state-wide insurance companies. In addition, check with independent rating services such as A.M. Best Company online or at the library to ensure that the company has a high rating.