Medigap for Seniors
2014 Medicare and Medigap Updates
Medigap for Seniors
Medigap is Medicare supplemental insurance. As the name suggested, Medigap is meant to fill in some of the gaps left by original Medicare. Medigap plans are sold by private insurance companies allowed to do so by CMS (Centers for Medicare and Medicaid) which is a department in the Department for Human ans Health Services (DHHS). It is referred to as Medigap for seniors because it is meant for persons over the age of 65 who are already enrolled under Medicare.
Persons with certain qualifying disabilities such as end stage renal disease (ESRD) and amytrophic lateral sclerosis (ALS) and are receiving Social Security Disability Insurance payments are entitled to receive Medicare coverage even if they are not yet 65 years old. This is not the case with Medigap as persons less than 65 years do not automatically qualify. The private insurance companies are not bound by federal are state law to sell policies to these people under 65 who are receiving Medicare benefits. This is why Medigap is called Medigap for seniors.
The private insurance companies are however at liberty to sell the plans to people younger than 65 but are allowed to make use of Medical underwriting and screen applicants.
In about 25 states, state law requires that the insurance companies make Medigap plans available to all Medicare enrollees and this include persons under 65 years old. In these states, Medigap for seniors is not exactly the correct term.
Medigap for seniors is gaining in popularity. This is because seniors are beginning to realize the benefits that accrue to them when signed up in a Medigap plan. Medigap helps cover the costs not covered by Medicare such as co-insurance, co-payments and deductibles.
Medigap also helps enrollees by simplifying the complex Medical billing procedure and helps people budget for their health care costs. There is also the benefit of limiting out of pocket costs.
Another major reason why Medigap for seniors is gaining popularity is rising healthcare costs. Medicare usually covers only 80% of the health care costs leaving the other 20% for the beneficiary to meet in out of pocket costs. Increasing health care costs means Medicare beneficiaries have to shell out more and more in out of pocket costs as there is likely to be no cap on them. Medigap for seniors provides a bit of protection from rising out of pocket costs by paying for certain expenses.
To enjoy benefits offered by Medigap for seniors, individuals must pay a monthly premium. The premium will vary from one plan to the next (because plans offer different benefits) and from one insurance company to the next (because different companies use different rating methods and there is no regulation on how much to charge on a plan).