Medicare Coverage Gap
2014 Medicare and Medigap Updates
The Medicare Coverage Gap
Medicare insurance will not necessarily pay for all health care costs and this is called the Medicare coverage gap. The gap is also referred to as the ‘donut hole’. It is simply the limit on what Medicare will cover for health care. This limit is only temporary, because your coverage for prescription drugs, medical checkups, co-payments and other things paid by Medicare is returned once you have spent a particular amount in paying for your own health care costs. This is referred to as the out of pocket cost limit. The reason why the Medicare coverage gap is called the ‘donut hole’ is because of the time period when you have no coverage.
The point at which coverage resumes is called the catastrophic coverage level. Above the catastrophic coverage level, Medicare will go back to covering most of the costs of your health care. However, during the Medicare coverage gap the medical debt you are responsible for can add up. For this reason most individuals have a medicare supplement policy to cover them during this period.
The Medicare coverage gap is not all doom and gloom though. During the coverage gap, the plan still covers a small percentage of the cost of generic drugs and there is an automatic discount on brand name prescription drugs. When calculating the total out of pocket costs, the fact that you got discounts is not taken into account and it is taken that you paid full price on the brand name drugs. The aim of this is to help you get out of the Medicare coverage gap as soon as possible.
You can get help during your Medicare coverage gap by purchasing a medicare supplement policy, or medigap, as it is called. This is an insurance policy specifically designed by insurance companies to step in during the time you are not covered by Medicare. Besides filling in the Medicare coverage gap, most Medigap policies will cover some medical costs not ordinarily paid for under Medicare such as healthcare outside the United States.
Medigap insurance has a number of different types which range from plan A to J, A being the most basic plan. The more the Medigap plan covers, the higher the premiums you will have to pay. The law however, requires all insurance companies offering Medicare supplemental insurance to give the exact coverage for each plan. This means you should shop around for the best price since the plan is going to be legally the same regardless of which company you purchase it from.
Another option is to get a Medicare Advantage Plan. Depending on the plan, there is the possibility of completely eliminating the Medicare coverage gap. This however means you will have to pay higher insurance premiums. You can also apply for extra help from Social Security. This option is open for people with low income and the extra help is referred to as the low income subsidy.
Our website has a large number of quality articles on Medicare and Medigap supplement insurance and we add others often and try to stay updated. Hopefully this information on the Medicare coverage gap has been useful.