What are the “Gaps”?
Medicare helps pay for a large portion of health care costs but it was never intended to pay all of them. Medicare has many limitations which are called “Gaps”.
These are the “Gaps” or “Holes” in Original Medicare:
- Part A Hospital Deductible
- You are responsible for paying if admitted in hospital
- $1,340 in 2018 (was $1,316 in 2017)
- NOT an annual or one-time deductible (based on benefit period of 60+ days, so you may need to pay this several times per year depending on how many times you’re admitted to the hospital)
- Part A Hospital Coinsurance or Copayment
- Days 61-90 = You pay $335 PER DAY in 2018 (was $329 in 2017)
- Days 91 or more = You Pay $670 PER DAY in 2018 (was $658 in 2017) for each lifetime reserve day after the 90th day of the benefit period
- Blood (first 3 pints)
- Part A Hospice care coinsurance or copayment
- Skilled nursing facility care coinsurance = $167.50 in 2018 (was $164.50 in 2017)
- Part A deductible
- Part B Deductible = $183 (2018)
- Part B excess charges
- Foreign travel emergency coverage
Medigap (Medicare Supplement) Insurance is health insurance offered by private insurance companies to help pay some of the Gaps mentioned above. There are many laws created by both federal and state governments designed to protect you as the Medicare beneficiary.
Medigap plans are standardized by Medicare. These standardized plans are identified as letters A through N and must offer the same benefits regardless of which company offers/sells that plan. Companies are not allowed to make any changes to these standardized plans. All companies offer the exact same benefits within each plan letter.
Costs of Medigap
Because Medigap policies are separate from Medicare plans, they require a separate premium. All Medigap plans have a premium that must be paid to the insurance company directly. Many companies offer discounts for paying premiums by monthly Electronic Funds Transfer (EFT) from your bank or other financial institution. Premiums vary widely from plan-to-plan, and company-to-company. It is important to compare costs between each company as well as each plan letter in your area.
Choosing a Medigap Company
Because according to the publication:2016 Choosing a Medigap Policy: A Guide to Health Insurance for People with Medicare page 9 says, “Cost is usually the only difference between Medigap policies with the same letter sold by different insurance companies.” According to Medicare’s own publication, this states that COST is the only difference between different companies within the same plan letter. So essentially if ABC Company and XYZ Company both offer a Medigap Plan G, and the benefits are identical between the two companies, then cost is the only difference between these companies. So if cost is the only difference between companies in most cases. There are a few other factors to consider such as the financial strength of the company and how long they have been in business.
Which Medigap Plan is for YOU?
These are the standardized plans