Medigap insurance is a name given to a type of healthcare insurance sold in the United States. It is intended for people who receive health coverage under the Medicare scheme. Medigap is a privately-provided scheme which covers costs which are not paid by Medicare. For example, as Medicare now pays some of the costs of prescription drugs, Medigap plans for new customers today do not include prescription drug coverage. Medigap is not available to people who receive Medicaid coverage.
There are twelve standard Medigap insurance plans, known as "Medigap Plan A" through "Medigap Plan L." Plan A is the most basic and simply covers the co-payments you would normally pay yourself on any Medicare-funded healthcare, plus three pints of blood each year. Plan J is the most comprehensive and includes costs such as recovery at home and medical emergencies suffered overseas. Plans K and L work differently to the rest as you will usually pay lower premiums but be responsible for costs up to a fixed amount each year. If you are in Massachusetts, Minnesota or Wisconsin, check your situation carefully as the benefits offered under Medigap vary slightly in these states.
It's particularly important to shop around when choosing a Medigap insurance provider. This is because providers are not allowed to vary the terms of the 12 different Medigap plans. This means the only competition will usually be on price so a firm charging more won't usually be offering any better value. However, you may want to research whether your potential providers have a good record for customer service and handling claims.
Your Medigap premium, which is paid on top of your Medicare premium, is paid directly to the insurance company you get the coverage from. Once you have paid your first year's premium, you have the automatic right to be covered in each following year as long as you pay the premium. Bear in mind that the insurance company has the right to up the premium each year, so when choosing between companies you may want to research how steep previous annual premium rises have been.
When deciding whether to buy a Medigap insurance policy, take account of the fact that it only covers an individual. Unlike some healthcare plans, it does not cover a spouse and he or she will need to buy their own policy. If you are on a low income, you should check whether you qualify for the Qualified Medicare Beneficiary Program which covers some costs beyond normal Medicare coverage. If this is the case, you usually likely find a Medigap policy is not worthwhile.
