Understanding Medicare Medigap policies: Medicare 101 class planned


San Juan Basin Area Agency on Aging 

With Medicare Open Enrollment starting Oct. 15, the San Juan Basin Area Agency on Aging is sharing important information on Medicare topics. 

When enrolling in Medicare, beneficiaries have choices regarding their Medicare coverage. They can stay with Original Medicare, add a Medicare Advantage Plan, or add a Medicare Medigap (Supplemental) plan. 

This article discusses Medigap plans and how they differ from Advantage plans. 

Medigaps are health insurance policies that offer standardized benefits to work with Original Medicare (not with Medicare Advantage). They are sold by private insurance companies. 

If you have a Medigap, it pays part or all of certain remaining costs after Original Medicare. Medigaps are designed to cover outstanding deductibles, coinsurance, and copayments. People often refer to these charges as the “gaps” in Original Medicare’s coverage, hence the term “Medigap.” 

Medigaps may also cover health care costs that Medicare does not cover at all, like emergency care received when traveling abroad. Remember, Medigaps only work with Original Medicare. If you have a Medicare Advantage Plan, you cannot buy a Medigap.

What costs do
Medigaps cover?

Some costs are covered by all Medigaps. These include: 

• Part A hospital coinsurance. All Medigap policies pay for the Part A hospital daily coinsurance charge for all of your covered days in a benefit period. This includes the daily coinsurance charge for days 61 through 90 that you spend as a hospital inpatient during a benefit period, as well as the daily coinsurance charge for up to 60 inpatient hospital lifetime reserve days. In 2023, the coinsurance for days 61-90 is $400 per day, and the coinsurance for lifetime reserve days is $800 per day. All Medigap policies also cover the full cost of 365 additional hospital days during your lifetime. 

A benefit period is the way that Original Medicare measures your use of inpatient hospital and skilled nursing facility (SNF) services. Your benefit period begins the day you are admitted to the hospital as an inpatient and ends when you have been out of a hospital or SNF for more than 60 consecutive days. 

• Part B coinsurance. All Medigaps pay toward the 20 percent coinsurance for Medicare-covered outpatient medical services, like X-rays, durable medical equipment and visits with a health care provider. All Medigaps cover at least part of the Part B coinsurance, and they will cover the full Part B coinsurance for certain preventive services. 

• First three pints of blood. All Medigaps pay for part or all of the cost of your first three pints of blood. If you are hospitalized and the hospital needs blood for a medical procedure or blood transfusion, then your Medigap will pay for the first three pints. If you do not have a Medigap, you will be responsible for this cost. 

•Part A hospice care coinsurance or copay. All Medigaps cover the full cost of hospice coinsurance charges and copays for hospice-related drugs and respite care, as long as the Medigap was purchased on or after June 1, 2010. Respite care is care you receive as a hospice inpatient while your usual caregiver rests.

Some Medigaps cover all or part of the following costs: 

• Part A SNF coinsurance. Some Medigaps pay for your SNF coinsurance charge for all your covered days in a benefit period (the coinsurance for days 21-100 is $200 per day in 2023).

• Part A deductible. Some Medigaps pay for your Part A deductible, which is the amount you owe out of pocket at the beginning of a hospital inpatient stay (the Part A deductible in 2023 is $1,600 per benefit period). 

• Part B excess charges. Excess charge is the difference between a health care provider’s actual charge and Medicare’s approved amount for payment. Excess charges may only be charged by nonparticipating Medicare providers. These providers do not take assignment in all cases, which means they do not agree to accept the Medicare-approved amount for services as payment in full. Nonparticipating providers can charge up to 15 percent more than the Medicare-approved cost for services (this only applies to certain Medicare-covered services, and doesn’t apply to some supplies and durable medical equipment). If you have a Medigap that covers excess charges, you will not have to pay that extra 15 percent if you see a nonparticipating provider. 

• Foreign travel. Medicare does not cover services you receive in a foreign country, but some Medigaps cover emergency health care when you are abroad. These Medigaps cover 80 percent of the cost of emergency care abroad during the first two months of your trip, up to a lifetime limit of $50,000, after you meet a deductible. 

Note that some Medigap policies cover extra benefits, such as gym memberships or dental. You may come across these types of policies when shopping for a Medigap.

What is the difference
between having a
Medicare Advantage Plan and having Original
Medicare with a Medigap? 

Having Original Medicare and a Medigap allows you to see any provider and use any facility that accepts Medicare, while having a Medicare Advantage Plan typically means you can only see in-network providers.

Therefore, if you have Original Medicare and a Medigap, you can receive covered care anywhere in the country (if the care is from a provider or facility that accepts Medicare). In contrast, if you have a Medicare Advantage Plan, you will likely be out of your plan’s service area while in other parts of the country. In addition, if you have Original Medicare and a Medigap you do not need a referral from a primary care physician to see a specialist, while having a Medicare Advantage Plan typically means you need a referral to see a specialist. This means that you will generally have greater provider access if you have Original Medicare and a Medigap. You will also likely have far fewer out-of-pocket costs than you would with a Medicare Advantage Plan, as Medigaps are designed to cover deductibles, coinsurance and copayments. 

While you would have to pay an additional monthly premium for your Medigap, your out-of-pocket costs for the care you receive is greatly limited. This means Original Medicare and a Medigap may be a more affordable option for you if you have more health needs and receive more costly medical care throughout the year. 

On the other hand, if you have a Medicare Advantage Plan, you will owe out-of-pocket costs like copays, which may be more affordable if you do not have many health needs and do not receive much medical care throughout the year. While Medicare Advantage Plans may charge a monthly premium in addition to the Part B premium, this additional monthly premium is likely less expensive than the monthly premium for many Medigaps. Additionally, Medicare Advantage Plans may cover extra services that are not covered by Original Medicare and not covered by most Medigaps, such as vision, hearing and dental care. 

Medicare Advantage Plans are a way to receive part A, B, and D (drug plan) benefits in one plan; whereas, those with Original Medicare and a Medigap likely must enroll in a stand-alone Part D plan to receive Medicare prescription drug coverage. 

Generally, the best time to enroll in a Medigap policy is during your open enrollment period. Under federal law, you have a six-month open enrollment period that begins the month you are 65 or older and enrolled in Medicare Part B. 

During your open enrollment period, Medigap companies must sell you a policy at the best available rate regardless of your health status, and they cannot deny you coverage. The best available rate may depend on a number of factors, including your age, gender, whether you smoke, your marital status and where you live. 

To ensure that you are getting the best available rate, you may want to check with your State Health Insurance Assistance Program (SHIP) counselor. If you purchase a Medigap during your open enrollment period, policies are limited in their ability to exclude coverage for pre-existing conditions, meaning conditions you had before you enrolled.

For more information on Medicare plans, enrollment, deadlines and details, please plan to attend a Medicare 101 class at 1:30 p.m. on Sept. 11 at the Ruby M. Sisson Memorial Library. You can also make an appointment with a certified SHIP Medicare Counselor at (970) 264-0501, ext. 4.