Medicare Supplement
or "Medigap"
What it is
Medicare Supplement (or Medigap) plans offer flexibility plus low/no copays and deductibles, but for a monthly premium charge.
- Medigap plans were the first form of secondary insurance ever offered. After people learned that there are “gaps” in Original Medicare–gaps that can be very expensive–the insurance industry created products the cover those gaps.
- The first “gap” in Original Medicare is Part A (or Hospital), a deductible of $1700 per year per incident for in-patient hospital stay. So if you are admitted to the hospital–even for a single day–your cost will be about $1700. Most Medigap plans will pay that for you.
- The first “gap” is in Original Medicare’s Part B (or Medical) cover is the annual deductible of approximately $230.
- The second “gap” in Part B is the 20% coinsurance, which can be very substantial. Imagine going into surgery and the surgeon botched the procedure. That happened to one of my clients and the bills for that amounted to over $1,000,000. That’s $200,000 that he was on the hook for. With Medigap insurance, specifically a plan G or better, his cost would be $0 for coinsurance, not $200,000.
Why it's great...
People love their Medicare Supplement plans because of these reasons
Advantages
- They are flexible
- See most doctors and providers
- Great for snowbirds and frequent travelers
- Never need a referral from a primary doctor
- Lower copayments and deductibles
Why it's lacking...
What people don't like about Medigap plans (compared to Medicare Advantage)
Disadvantages
- Monthly premiums ($100-$250 per month)
- Pay for Medicare twice: Part B and Medigap
- Drug coverage not included
- No coordinated care through primary doctor
- No benefits like dental, vision, health club
Know this
Plan G (or N, or any other Plan) at one company will have the same coverage at any other company.
- Medigap plans are available to you without consideration of your health as soon as you turn 65 (and have Medicare A and B) and up to six months later. After that time period you will be subject medical underwriting.
- Coverage for Medigap plans are standardized, so you don’t have to worry about one company offering coverage that another company does not offer. For example, a Plan N with Company X will cover the same medical and hospital coverages of Company Y.
- You do want to choose a company wisely. Some companies have a better reputation for underwriting (if you require that), others have a better reputation for claims handling, and others charge far less premium than their competitors.
- I can help you determine the best fit. Reach me, Steve, at 510-736-3239.