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Medigap policies are supplemental health insurance policies sold by private insurers, designed to fill some of the "gaps" in health coverage provided by Medicare. Although Medicare covers many health care costs, you still have to pay certain coinsurance and deductible amounts, as well as paying for services that Medicare does not cover.
Generally, you must be enrolled in the original Medicare Parts A and B before you need to purchase a Medigap insurance policy. Other types of health insurance coverage, such as Medicare Advantage, other Medicare health plans, Medicaid, or employer-provided health insurance, do not work with Medigap policies.
Choosing a Policy
There are two primary factors to consider when choosing a Medigap policy.
• Needed benefits: Carefully consider what benefits you are most likely to need; you may not need the most comprehensive plan.
• Cost: Once you have decided which benefits you will need, shop for the policy that provides those benefits at the lowest cost. Policy Costs Can Differ
• Discounts: Some insurers may offer discounts to certain classes of people, such as women, nonsmokers, or married couples.
• Medical underwriting: An insurance company may require you to fill out a detailed questionnaire on your health. The information you provide is used to determine whether or not a policy will be issued, or what premium to charge.
• Part A skilled nursing: Plans C-G, M and N — Pay 100% of the coinsurance amount ($144.50 per day in 2012) for days 21-100 in a skilled nursing facility. Plans K and L — Pay the percentage shown of the coinsurance amount for days 21-100 in a skilled nursing facility.
• Part A deductible: Plans B-G, and N — Pay 100% of the Part A deductible ($1,156 in 2012) for the first 60 days of hospitalization. Plans K, L, and M — Pay the percentage shown of the Part A deductible for the first 60 days of hospitalization.
• Part A hospice: Plans A-G, M and N — Pay 100% of the Part A hospice copayment. Plans K and L — Pay the percentage shown of the Part A hospice copayment.
• Part B deductible: Plans C and F — Pay 100% of the annual Part B deductible ($140.00 in 2012).
• Part B excess charges: Plans F and G — Pay 100% of the Part B excess charges
• Emergency foreign travel: Plans C-G, M and N — The insured pays a $250 deductible and then 20% of any remaining costs of emergency health care. This benefit is typically limited to a $50,000 lifetime maximum and the first 60 days of each trip.
• Part B preventive care: All plans — Pay 100% of the coinsurance for preventive care.
Steve Savant is a national insurance columnist, financial color commentator and host of the daily Internet talk show, The Business Insurance Zone. Steve's special guest is Sam Corey the Third, National Medicare Supplement Specialist.
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