First in Protecting, Your Seasoned Years.
Medigap refers to various private health insurance plans sold to supplement Medicare in the United States. Medigap insurance provides coverage for many of the co-pays and some of the co-insurance related to Medicare-covered hospital, skilled nursing facility, home health care, ambulance, durable medical equipment, and doctor charges. Medigap’s name is derived from the notion that it exists to cover the difference or “gap” between the expenses reimbursed to providers by Medicare Parts A and B for the preceding named services and the total amount allowed to be charged for those services by the United States Centers for Medicare and Medicaid Services. As of 2006, 18% of Medicare beneficiaries were covered by a Medigap policy. Public-option Part C Medicare Advantage health plans and private employee retiree insurance provides a similar supplemental role for almost all other Medicare beneficiaries not dual eligible for Medicaid.
8 things to know about Medigap policies
- You must have Medicare Part A and Part B.
- If you have a Medicare Advantage Plan, you can apply for a Medigap policy, but make sure you can leave the Medicare Advantage Plan before your Medigap policy begins.
- You pay the private insurance company a monthly premium for your Medigap policy in addition to the monthly Part B premium that you pay to Medicare.
- A Medigap policy only covers one person. If you and your spouse both want Medigap coverage, you’ll each have to buy separate policies.
- You can buy a Medigap policy from any insurance company that’s licensed in your state to sell one.
- Any standardized Medigap policy is guaranteed renewable even if you have health problems. This means the insurance company can’t cancel your Medigap policy as long as you pay the premium.
- Some Medigap policies sold in the past cover prescription drugs, but Medigap policies sold after January 1, 2006 aren’t allowed to include prescription drug coverage. If you want prescription drug coverage, you can join a Medicare Prescription Drug Plan (Part D).
- It’s illegal for anyone to sell you a Medigap policy if you have a Medicare Medical Savings Account (MSA) Plan.
Medicare Part A (2017)
Part A is Hospital Insurance and covers cost associated with confinement in a hospital or skilled nursing facility. (see Medicare Part A)
When you are hospitalized for:
|1-60 Days||Most confinement costs after the required Medicare Deductible||$1,316 Part A Deductible|
|61-90 Days||All eligible expenses, after the patient pays a per-day copayment.||$329/Day|
|91-150 Days||All eligible expenses, after patient pays per-day copayment.
(These Are Liftetime Reserve Days Which may never be used again.)
|151 days or more||Nothing||You Pay All Cost|
|Skilled Nursing Confinement:
When you are hospitalized for at least 3 days and enter a Medicare Approved skilled nursing facility within 30 days after a hospital discharge and are receiving skilled nursing care.
|All eligible expenses for the first 20 days; then all eligible expenses, (if you qualify), for days 21-100, after patient pays a per day copayment.||After 20 days
Medicare Part B (2017)
Part B is Medical Insurance and covers physicians services, outpatient care, test, and supplies. (see Medicare Part B)
You Pay $183 Annual Part B Deductible THEN
|Medical Expenses:Physicians services, inpatient, outpatient medical/surgical services, physical/speech therapy, diagnostic test.||80% of approved amount||20% of approved amount|
|Clinical Laboratory Services
Blood Test, Urinalysis
|Generally 100% of approved amount||Nothing for Services|
|Home Health Care
Part-time or intermittent skilled care, home health aide services, durable medical supplies and other services.
|100% of approved amount; 80% of approved amount for durable medical equipment||Nothing for Services; 20% of approved amount for durable medical equipment|
|Outpatient Hospital Treatment
Services for the diagnosis or treatment of an illness or injury
|Medicare payment to hospital based on hospital cost||20% of Billed Amount|
|Blood||After first 3 pints of blood, 80% of approved amount||First 3 pints plus 20% of approved amount for additional pints|
|On all Medicare-covered expenses, a doctor or other health care provider may agree to accept Medicare “assignment.” This means the patient will not be required to pay any expense in excess of Medicare’s “approved” charge. The patient pays only 20% of the “approved” charge not paid by Medicare.
Physicians who do not accept assignment of a Medicare claim are limited as to the amount they can charge for covered services.
Medicare Part D
Medicare Part D
Medicare started offering insurance coverage for prescription drugs through Medicare prescriptions drug plans and other health plan options. Medicare’s prescription drug coverage will typically pay over half of your drug costs, for a monthly premium. (see Medicare Part D)
Important points you need to know:
- Medicare prescription drug coverage helps you pay for the prescriptions you need.
- Medicare prescription drug coverage is available to all people with Medicare.
- There is additional help for those who need it most.
- Medicare prescription drug coverage pays for brand name as well as generic drugs.
Your Medicare Prescription Drug Coverage
What is Medicare prescription drug coverage?
Medicare prescription drug coverage is insurance that covers both brand-name and generic prescription drugs at participating pharmacies in your area. Medicare prescription drug coverage provides protection for people who have very high drug costs or from unexpected prescription drug bills in the future.
Who can get Medicare prescription drug coverage?
Everyone with Medicare is eligible for this coverage, regardless of income and resources,health status, or current prescription expenses.
When can I get Medicare prescription drug coverage?
You may sign up when you first become eligible for Medicare (three months before the month you turn age 65 until three months after you turn age 65). If you get Medicare due to a disability, you can join from three months before to three months after your 25th month of cash disability payments. If you don’t sign up when you are first eligible, you may pay a penalty. If you didn’t join when you were first eligible, your next opportunity to enroll will be from October 15 to December 7.
How does Medicare prescription drug coverage work?
Your decision about Medicare prescription drug coverage depends on the kind of health care coverage you have now. There are two ways to get Medicare prescription drug coverage. You can join a Medicare prescription drug plan or you can join a Medicare Advantage Plan or other Medicare Health Plan that offers drug coverage.
Whatever plan you choose, Medicare drug coverage will help you by covering brand-name and generic drugs at pharmacies that are convenient for you.
Like other insurance, if you join, generally you will pay a monthly premium, which varies by plan, and a yearly deductible. You will also pay a part of the cost of your prescription, including a copayment or coinsurance. Costs will vary depending on which drug plan you choose. Some plans may offer more coverage and additional drugs for a higher monthly premium. If you have limited income and resources, and you qualify for extra help, you may not have to pay a premium or deductible. You can apply or get more information about the extra help by calling Social Security at 1-800-772-1213 (TTY 1-800-325-0778) or visiting socialsecurity.gov.
Why should I get Medicare prescription drug coverage?
Medicare prescription drug coverage provides greater peace of mind by protecting you from unexpected drug expenses. Even if you don’t use a lot of prescription drugs now, you should still consider joining. As we age, most people need prescription drugs to stay healthy. For most people, joining now means protection from unexpected prescription drug bills in the future.
What if I have a limited income and resources?
There is extra help for people with limited income and resources. Almost 1 in 3 people with Medicare will qualify for extra help. If you qualify for extra help, Medicare will pay for almost all of your prescription drug costs. You can apply or get more information about the extra help by calling Social Security at 1-800-772-1213 (TTY 1-800-325-0778) or visiting socialsecurity.gov.
Things to Consider
There is a monthly cost you pay to join a Medicare drug plan. Premiums vary by plan.
This is the amount you pay for your prescriptions before your plan starts to share in the costs. Deductibles vary by plans. Some plans may not have any deductible.
This is the amount you pay for your prescriptions after you have paid the deductible. In some plans, you pay the same copayment (a set amount) or coinsurance (a percentage of the cost) for any prescription. In other plans, there might be different levels or “tiers,” with different costs. (For example, you might have to pay less for generic drugs than brand names. Or, some brand names might have a lower copayment than other brand names.) Also, in some plans your share of the cost can increase when your prescription drug costs reach a certain limit.
A list of drugs that a Medicare drug plan covers is called a formulary. Formularies include generic drugs and brand-name drugs. Most prescription drugs used by people with Medicare will be on a plan’s formulary. The formulary must include at least two drugs in categories and classes of most commonly prescribed drugs to people with Medicare. This makes sure that people with different medical conditions can get the treatment they need.
Some drugs are more expensive than others even though some less expensive drugs work just as well. Other drugs may have more side effects, or have restrictions ono how long they can be taken. To be sure certain drugs are used correctly and only when truly necessary, plans may require a “prior authorization.” This means before the plan will cover these prescriptions, your doctor must first contact the plan and show there is a medically-necessary reason why you must use that particular drug for it to be covered. Plans might have other rules like this to ensure that your drug use is effective.
If you have high drug costs, you may consider which plans offer additional coverage. In some plans, if your costs reach an initial coverage limit, then you pay 100% of your prescription costs. This is called the coverage gap. Some plans might offer some coverage during the gap. Even in plans where you pay 100% of covered drug costs after a certain limit, you would still pay less for your prescriptions than you would without this drug coverage.
Drug plans must contract with pharmacies in your area. Check with the plan to make sure your pharmacy or a pharmacy in the plan is convenient to you. Also, some plans may offer a mail-order program that will allow you to have drugs send directly to your home. You should consider all of your options in determining what is the most cost-effective and convenient way to have your prescriptions filled.
Peace of mind now and in the future
Even if you don’t take a lot of prescription drugs now, you still should consider joining a drug plan. As we age, most people need prescription drugs to stay healthy. For most people, joining now means you will pay a lower monthly premium in the future since you may have to pay a penalty if you choose to join later. You will have to pay this penalty as long as you have a Medicare drug plan. If you reach the point where you have spent your plan’s out-of-pocket drug costs during the year, the plan will pay most of your remaining drug costs. This protection could start even sooner in some plans.