What is Medigap? Medigap is supplemental health insurance designed to fill the "gaps" in Original Medicare (Parts A and B). It's sold by private insurance companies but standardized and regulated by the federal government.
Why you might need it: Original Medicare typically covers about 80% of approved medical costs, leaving you responsible for the remaining 20% plus deductibles. Without a cap on out-of-pocket expenses, these costs can add up significantly. For example, a major surgery or extended hospital stay could result in thousands of dollars in coinsurance payments. Medigap helps with this.
Original Medicare has several cost-sharing requirements that Medigap helps cover.
Medigap policies are standardized and labeled with letters (A, B, C, D, F, G, K, L, M, N). Each plan type covers different combinations of gaps. Plan G and Plan N are currently the most popular because Plans C and F are no longer available to new Medicare beneficiaries.
Plan G covers almost everything except the Part B deductible. Plan N covers most gaps but requires small copays for doctor visits and emergency room visits. You can compare Medigap Plan Benefits at medicare.gov.
Payment flow: When you receive care, Medicare pays its portion first, then your Medigap policy automatically pays its part of the remaining approved charges. You typically don't need to file claims.
Let’s look at an example. You have a $1,000 doctor visit.
Medigap vs. Medicare Advantage: It’s one or the other. You either have Original Medicare plus a Medigap plan, or you have a Medicare Advantage plan. You cannot have both.
Medigap vs. Medicare Part D: Medigap generally doesn't cover prescription drugs, so most people with Medigap also need a separate Medicare Part D plan.
Cost structure: You pay separate premiums for Part B, Medigap, and Part D, but you then have much more predictable, low out-of-pocket costs when you need care.
Medigap essentially provides more financial predictability and comprehensive coverage when combined with Original Medicare, making it easier to budget for healthcare costs and reducing unexpected medical bills.
This information is based on currently available Medicare data and is subject to change. Find more details on Medicare.gov or call 1-800-MEDICARE for the most current information.
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