Medicare- the federal government-sponsored health insurance program for the elderly and disabled- provides health coverage for most Americans over age 65 and for those considered permanently disabled.
However, Medicare enrollees often are surprised to find the program does not cover all their medical expenses. The Medicare program actually is split into four parts: Part A (hospitalization), Part B (physician and outpatient services), Part D (drug coverage) and Medicare HMOs and other managed care plans (Part C, known as the Medicare Advantage program).
Many of those enrolled in traditional Medicare also purchase Medicare supplemental insurance, or "Medigap" insurance, designed to fill in the substantial gaps in Medicare coverage.
Medicare supplemental insurance policies help pay for expenses not covered by traditional Medicare, such as co-payments and deductibles. However, consumers need to be aware that Medigap policies don’t cover long-term nursing home care or private-duty nursing, dental care, eyeglasses or hearing aids.
Medigap Policies Simple to Compare
Medicare supplemental insurance is regulated by the federal government, and so the private insurers that sell it can offer only standardized Medicare supplement policies. This makes it easy for consumers to compare different policies. In most states, beneficiaries can choose from among up to 12 different Medigap benefit packages, known as Medigap Plans A through L. In Massachusetts, Minnesota, and Wisconsin, state laws require Medigap policies to be standardized in a different way.
The plans range from full comprehensive coverage to high-deductible coverage that just pays for a few extras. For example, every plan from A to L pays for hospital co-payments and all costs after Medicare Part A hospital benefits are exhausted, but only two plans, E and J, cover preventive care.
Premiums for Medicare supplemental insurance vary from insurance company to insurance company even when plan benefits are the same. That means consumers are making their choices based on price and service, not benefits.
Choosing the Best Medicare Supplement Plan
In order to choose the right Medicare supplemental insurance package, consumers first need to analyze their medical expenses and attempt to estimate future expenses. This can be tricky to do, but some experts suggest making a chart or a spreadsheet of current expenses, like deductibles and physician co-payments, and then to add a significant chunk, because future medical expenses are likely to be more than current expenses.
Next, consumers should look at the benefits provided in Medigap plans A through L to determine which benefit package would best suit their needs. Because the benefit packages are similar, it's likely several Medicare supplemental plans would be a good fit, but with further analysis, one is likely to come out on top.
Then, it's time for beneficiaries to see what plans are available in their regions. Some companies, including Aetna Inc. and AARP (which partners with UnitedHealth Group to offer Medigap, Part D drug coverage, and Medicare Advantage managed care insurance plans) offer Medigap policies in all or almost all 50 states. Others may be more local.
It's wise to get Medicare supplement insurance quotes from a variety of insurers. Generally, because Medicare supplemental insurance plans are standardized and tightly regulated by the government, consumers can feel safe buying the cheapest plan available in their area with the benefits package they desire.
Any standardized Medicare supplemental insurance policy is guaranteed renewable as long as the premiums are paid, which means insurance companies cannot drop a policyholder if that person's health deteriorates.
Jane Anderson - Jane M. Anderson spends as much time as possible on the water, working and sailing on boats. She grew up sailing Sunfish and Rhodes 19s on ...
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