How to Avoid Medicare “Gaps”
Medicare helps to pay for a wide variety of health services, from flu shots to hospital stays, and from preventive health screenings to hospice care.
But it doesn’t cover everything. And it doesn’t cover all your out-of-pocket costs.
Many services covered by Medicare require co-payments, coinsurance, and deductibles. You can purchase supplemental insurance to cover these "gaps" in Medicare.
Such coverage is called Medicare Supplement Insurance, or Medigap. Some Medigap policies also cover certain benefits that Medicare doesn’t, like emergency care in a foreign country.
If you have Medicare and you buy a Medigap policy, Medicare will pay its share of the Medicare approved amount for covered health services. Then your Medigap policy pays its share.
You have to pay for Medigap yourself, and it’s sold through private insurance companies. You can buy it only if you have Original Medicare, not Medicare Advantage, which is managed care provided by private insurers.
Every Medigap policy has to follow federal and state laws designed to protect you. Medigap insurance companies can sell you only a "standardized" Medigap policy identified in most states by the letters A through N. Each standardized policy must offer the same basic benefits, no matter which company sells it.
So beware when you’re shopping for a Medigap policy: Cost is usually the only difference between Medigap policies with the same letter sold by different companies.
And there can be significant differences in how much various insurers charge for exactly the same coverage.
Here are some of the costs that Medigap policies often cover:
- Medicare Part A (hospital) coinsurance and hospital costs for up to 365 days after Medicare benefits run out;
- Medicare Part B (medical) coinsurance or copays;
- Blood (first three pints);
- Part A hospice care coinsurance or copays;
- Skilled nursing facility coinsurance;
- Part A and Part B deductibles.
Medigap policies generally don’t cover long-term care (like care in a nursing home), vision or dental, hearing aids, eyeglasses, and private duty nursing.
The best time to buy a Medigap policy is during your six month Medigap open enrollment period, because you can buy any Medigap policy sold in your state, even if you have health problems, for the same price as people with good health.