Medicare Parts A and B, on average, will cover about half of a seniors annual medical expenses which include hospital and medical services including . That is where Medigap insurance fits in, it can cover all the ‘gaps’ which are left over by medicare like deductibles and excess charges. These can add up to a lot of out-of-pocket expenses, especially if you are hospitalized or need skilled nursing home services.

Some Medigap policies will also pay for certain health services outside the United States and additional preventive services not included in Medicare.

Medicare Supplemental insurance (aka medigap) is totally optional and seniors are responsible for paying for it. Medicare will not pay any of your costs to purchase a Medigap policy.

Just how do Medicare supplement Insurance plans Function?

If you’ve got a medigap plan along with your medicare insurance, medicare will first cover it’s share of approved payments on your medical expenses. Your Medigap plan will then settle it’s share of expenses.

One example is: Alice G has cancer and visits her primary care physician every three to four months for follow-up care. Her Medigap policy covers Plan B coinsurance, but not her Plan B deductible. Right at the start of the year he has got to pay for his $162 deductible for medical expenses. Thereafter, Medicare pays 80% of the Medicare-approved amount of her doctor’s visit and her Medigap policy pays the remaining 20% – since Medicare approves an office visit amount of $65, Medicare pays $52 and Medigap pays $13.

Medicare supplement plans are marketed by private insurance companies. It has to be written clearly that these are just medicare supplement plans. And, each policy must follow Federal and state laws designed to protect consumers.

Medigap insurance companies are only allowed to sell you a standardized Medigap policy identified by letters A through L.

Every single Medigap plan must offer the same basic benefits, no matter which insurance company sells it. So, Medigap Plan F has the same set of benefits regardless of insurance company or location.

How Much Does Medicare supplement Insurance Cost?

The cost of a Medigap plan is determined by which letter you go with and what company you utilize.

Each of the plans (A through L) offers a different set of benefits and the costs vary with the amount of coverage. Basically, Plan B will cost less then Plan F since it provides much less coverage. Medigap plans that offer more benefits, such as Plan J, usually have a higher premium. According to the Medicare Rights Center, the most popular medicare insurance are C and F, because they cover major benefits and are less expensive than many other plans.

Despite the fact that Medicare defines what each Medigap plan can offer, it does not regulate what the insurance company may charge. Private insurance companies can charge different premiums for exactly the same Medigap coverage.

If you have an advantage plan, is Medigap Appropriate?

So long as you are enrolled in a Medicare Advantage Plan, you do not need to buy a Medigap policy. In fact, it is illegal for anyone to sell you a Medigap insurance policy if you are in an advantage plan. The benefits offered by a Medigap policy are addressed by your advantage plan and the Medicare supplemental insurance does not pay for your advantage plan’s deductibles, copayments, or coinsurance.