2014 Medicare and Medigap Updates
The Medicare Gap And Why You Need Supplement Insurance
The word Medigap was inspired by the phrase Medicare gap, a simple and appropriate description for the incomplete nature of standard Medicare plans in covering all essential hospitalization, consultation, and out patient benefits that most individuals encounter. Simply put, gaps in Medicare cause people to take money from their own pockets to pay for certain medical services. As a solution, Medigap was proposed to fill in the void that the Medicare gap created.
It is important to understand the degree to which your standard Medicare plan can cover your bills so you will know if there is a need to get supplemental medical insurance such as Medigap.
Standard Medicare is made up of two components: hospitalization insurance and medical insurance. Hospital insurance, or Part A, takes care of covering inpatient care in hospitals including coverage for hospice, nursing facility and home health care options especially for patients above 65 years old. Medical insurance, on the other hand, takes care of doctor services, outpatient care and some preventive services to help arrest the development and worsening of certain illnesses. Medicare gap arises from areas that are not covered in these conditions such as prescription drugs, room upgrades for inpatient care, and most notably a ceiling price for all outpatient transactions. For example, if you are suffering from gastrointestinal disorders and your doctor charges $100 for every visit, Medicare oftentimes only covers a fraction of this cost, up to 70% in some cases, leaving you to shoulder the remaining 30% of outpatient costs.
This Medicare gap has led to the creation of Medigap policies, supplementary medical insurance that fills in areas where Medicare is not applicable. Medigap policies are marketed as Plan A to Plan J, each plan carrying varying levels of additional coverage and also has corresponding premium prices proportional to the coverage. The law ensures that the same plan name contains exactly the same coverage regardless of the company offering the plan so you will only need to worry about premium pricing once you’ve chosen a policy that adequately fills in your Medicare gap.
To quickly summarize, the plans are progressive in coverage with Plan A offering the least and Plan J offering the most. Likewise, Plan B contains Plan A as a subset, Plan C envelopes Plan B... So on and so forth. Plan A shoulders the Medicare gap for outpatient consultation; Plan B contains Plan A provisions plus additional benefits like hospital deductibles; Plan C has added coverage for nursing home co-insurance filling in the limitations of Part A in your Medicare plan. The most comprehensive offer is Plan J which has blanket provisions covering excess doctor fees, additional provisions for preventive screening like X-rays and even MRIs where necessary, home recovery payments, hospital deduction, nursing home co-insurance and many others.
It is important to get supplementary medical insurance to top off your Medicare since the Medicare gap can seriously dig into your wallet if you are not adequately covered by additional packages. Study your plan well and decide which add-ons serve your need, then look for the best premium prices available so you can get the best value for your medical insurance.
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