Dill: how to avoid Medicare ‘gaps’ in necessary coverage

Medicare helps to pay for a wide variety of health services, from flu shots to hospital stays, and from preventive health screenings to hospice care.

But it doesn’t cover everything. And it doesn’t cover all your out-of-pocket costs.

Many services covered by Medicare require co-payments, coinsurance, and deductibles. You can purchase supplemental insurance to cover these “gaps” in Medicare.

Such coverage is called Medicare Supplement Insurance, or Medigap. Some Medigap policies also cover certain benefits that Medicare doesn’t, like emergency care in a foreign country.

If you have Medicare and you buy a Medigap policy, Medicare will pay its share of the Medicare-approved amount for covered health services. Then your Medigap policy pays its share.

You have to pay for Medigap yourself, and it’s sold through private insurance companies. You can buy it only if you have Original Medicare, not Medicare Advantage, which is managed care provided by private insurers.

Every Medigap policy has to follow federal and state laws designed to protect you. Medigap insurance companies can sell you only a “standardized” Medigap policy identified in most states by the letters A through N. Each standardized policy must offer the same basic benefits, no matter which company sells it.

So beware when you’re shopping for a Medigap policy: Cost is usually the only difference between Medigap policies with the same letter sold by different companies.

And there can be significant differences in how much various insurers charge for exactly the same coverage.

Here are some of the costs that Medigap policies often cover:

  • Medicare Part A (hospital) coinsurance and hospital costs for up to 365 days after Medicare benefits run out.
  • Medicare Part B (medical) coinsurance or co-pays.
  • Blood (first three pints).
  • Part A hospice care coinsurance or co-pays.
  • Skilled nursing facility coinsurance.
  • Part A and Part B deductibles.

Medigap policies generally don’t cover long-term care (like care in a nursing home), vision or dental, hearing aids, eyeglasses and private-duty nursing.

The best time to buy a Medigap policy is during your six-month Medigap open enrollment period, because you can buy any Medigap policy sold in your state, even if you have health problems, for the same price as people with good health. Medigap open enrollment period starts in the first month that you’re enrolled in Medicare Part B and you’re 65 or older.

Once this period is over, you can’t get it again. If you apply for Medigap coverage after your open enrollment period, there’s no guarantee that an insurance company will sell you a Medigap policy if you don’t meet the medical underwriting requirements.

Some other points to keep in mind:

  • You must have Medicare Part A and Part B to buy a Medigap policy.
  • A Medigap policy only covers one person. If you and your spouse both want Medigap coverage, you must each buy a separate policy.
  • You pay the private insurer a monthly premium for your Medigap policy, in addition to the monthly Part B premium that you pay to Medicare.
  • 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.
  • If you have a Medicare Advantage plan (like an HMO or PPO) but are planning to return to Original Medicare, you can apply for a Medigap policy before your coverage ends.

The Medigap insurer can sell it to you as long as you’re leaving the Advantage plan. Ask that the new Medigap policy start when your Medicare Advantage plan enrollment ends, so you’ll have continuous coverage.

Editor’s note: Mr. Dill is Medicare’s regional administrator for Arizona, California, Hawaii, Nevada, and the Pacific Territories.

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