Medicare and Medigap

2014 Medicare and Medigap Updates

Medicare and Medigap

Medicare and Medigap are two closely related insurance policies. Medicare is the health insurance coverage provided by the U.S. government for its elderly citizens. These are people who are above 65 years old. Medicare is also available to people younger than 65 who have a qualifying disability and are receiving Social Security disability payments or have a qualifying condition.

Qualifying conditions are end stage renal disease (ESRD), amyotrophic lateral sclerosis (Lou Gehrig’s disease).

Medigap on the other hand is supplemental insurance for Medicare. Though it is has strict government supervision, this supplemental insurance is sold by private insurance companies. The main aim of Medigap is fill in most of the gaps left by Medicare. Medicare insurance by itself covers only around 80% of medical costs. The other 20% is required to be met by the Medicare beneficiary by way of co-payments, co-insurance and deductibles. Medicare also does not cover certain medical costs such as eye care, dental care or medical costs incurred abroad.

Both Medicare and Medigap are under the control of CMS (Centers for Medicare and Medicaid), a division in the Department of Health and Human Services. CMS is directly in control of Medicare while it licenses and regulates the private insurance companies that sell Medigap policies.

Because Original Medicare leaves significant gaps in medical cost coverage, many enrollees will opt to have both Medicare and Medigap policies. The level of extra benefits you get from the supplemental insurance will depend on the specific Medigap policy you buy. The private insurance companies sell standardized plans. These plans are standardized by CMS and there are a total of 10 plans.

As the plans are standardized, an individual should be able to buy the plans from any insurance company authorized to sell the plans. However, a difference may arise in the premiums payable. It is therefore a good idea to do some comparison shopping among the various insurance companies before making a decision.

Medicare and Medigap have a number of things in common. For instance, just like Medicare, Medigap does not cover certain medical costs. None of the 10 Medigap policies will cover hearing aids, vision care and eyeglasses, dental care and dentures or long term nursing care.

Both Medicare and Medigap have insurance premiums. Under Medicare, enrollees will pay a premium for Part B (Medical Insurance) and a few (those who did not pay or had a spouse who paid Federal insurance taxes for s defined period of time) will also pay insurance premiums for Medicare Part A (Hospital Insurance).

An individual can get Medicare and Medigap coverage as soon as they turn 65 years old. However, you can only qualify for a Medigap coverage if you are enrolled in Medicare Parts A and B. It is best to sign up for a Medigap policies during the open enrollment period (which last 6 months) as the private insurance companies are bound by law to sell you any policy without using medical underwriting. After this period they can charge higher premiums and require physicals.