Medigap Insurance is a Medicare supplement policy that helps pay for costs that aren’t covered by Medicare Parts A and B. Individuals can purchase these policies from private insurers licensed to sell them in their state. It’s important that individuals do their research before purchasing a Medigap policy, because there are many questions that must be answered before making this type of investment. The first step is to decide what coverage the individual requires. For example, a person may want to consider buying a Medigap plan that pays the Medicare Part B deductible or the yearly blood test cost. It’s also important to compare the benefits and costs of different Medigap plans. Group retiree policies offered by employers often offer premiums that are lower than individual Medigap plans. In addition, these plans are guaranteed renewable, meaning that the retiree will not lose his or her coverage even if the company goes bankrupt.
When considering the various options, a retiree should also think about his or her financial situation. The premiums for individuals Medigap Insurance policies can be quite expensive. Some Medicare beneficiaries find that they can’t afford to pay for the high premiums and choose not to buy a Medigap policy at all. Others find that the premiums are affordable and they feel that the extra benefits and coverage are worth the investment.
Medicare beneficiaries have a one-time open enrollment period to purchase Medigap policies. This period begins on the first day of the month in which they turn 65 and enroll in Medicare Part B. During this period, the individual has what is called guaranteed issue rights, which means that an insurance company can’t deny him or her coverage based on past or present health problems. Individuals who sign up for a Medigap policy after this window may be denied coverage or might have to pay a much higher premium.
Depending on when an individual became eligible for Medicare, there are up to ten different Medigap policies available, each of which has a different lettered name (for example, Plan A, Plan F). All of these policies have standardized benefits; however, the premiums can vary from company to company. Some of these differences are due to the fact that some states require different coverages in their Medigap policies, and other differences can be caused by differences in the way in which the individual insurance companies choose to price their plans.
For those who already have a Medigap policy in place, it’s important to know what changes are occurring in the law regarding these policies. Individuals with existing non-standardized policies will be able to keep their old policies if they wish, but they must drop the older policy and take out a new standardized Medigap plan. The new standardized policy must provide equal or lesser benefits than the old policy.