Medicare is a health insurance program that the federal government offers to people over the age of 65 and to people with certain disabilities. Though it is generally good insurance, there are some things it does not cover. Some people choose to buy Medicare Supplemental Insurance to help pay for uncovered costs.
Medicare Coverage
Medicare, also known as Original Medicare, covers hospital and medical costs. However, you must pay a deductible before Medicare begins paying. You are also responsible for co-payments for covered services, and for the full cost of services that Medicare does not cover.
Medicare Supplemental Insurance
The federal government allows private insurance companies to sell Medicare Supplemental Insurance policies, more commonly called Medigap, which cover some of the Medicare costs for which you are responsible. Medicare will not pay for your Medicare Supplemental Insurance.
Requirements
Medicare Supplemental Insurance policies must comply with very strict state and federal laws. Medigap policies must be labeled "Medicare Supplement Insurance" and are standardized according to the letters A-N. This means that all corresponding Medigap policies will offer the same coverage, regardless of the insurer. However, each insurer is permitted to charge different premiums.
Features
Insurance companies are not required to sell every Medicare Supplemental Insurance plan, though they must offer Plan A if they offer any. Plan A covers Medicare hospital co-payment costs up to an additional year; Medicare medical co-payments, not including more than $120 in costs of preventive services; and the first three pints of blood needed by a patient. Some other features included in Plans B through L include: Hospice care co-payments; foreign travel emergency costs; at-home recovery costs; and skilled nursing facility co-payments.
Considerations
You should consider what your medical needs might be when purchasing a Medicare Supplemental Insurance policy, as the coverage and costs may differ widely. If you are trying to keep the cost of your premium lower, you might opt to purchase a plan with a high deductible, or one that provides only partial payment for some of the services offered.
Enrollment
The best time to purchase a Medicare Supplemental Insurance policy is during your open enrollment periods. If you purchase outside of these periods, insurers may refuse to sell you certain policies or make you wait for your coverage to start. They may also charge you far higher rates. To get the best coverage and price, be sure to check your eligibility, open enrollment periods, and planned changes in laws governing Medicare Supplemental Insurance plans before enrolling.
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