Medigap Plans Help Reduce The Burden Of Out-Of-Pocket Costs
Posted on: 7 June 2023
Share
Medicare supplement plans are a way for people who use Medicare as their primary insurance to meet any funding shortfalls for medical bills. These gap plans also provide the benefit of enhanced coverage on a variety of medical expenses Medicare may not cover or cover in full.
Who provides Medigap insurance plans?
Gap or supplemental Medicare plans are not provided via Medicare directly and are not government-derived plans. Instead, private insurance companies offer this coverage, and most major health insurance providers offer a version of this supplemental policy.
How does a supplemental plan work with Medicare?
According to the U.S. Centers for Medicare and Medicaid Services, or CMS, coordination of benefit rules help determine if Medicare or the supplemental insurance provider pays a claim first and which insurance pays what percentage of costs. When Medicare is the primary insurer, it pays first, and then supplemental coverage kicks in. This standard Medigap scenario differs from other insurance types, such as personal or spouse employer-provided coverage, as they usually serve as the primary plan with Medicare as a secondary insurer.
After Medicare covers their portion of a medical procedure, doctor's visit, or other need, Medigap supplemental coverage picks up the costs of co-insurance payments or helps meet an initial deductible. These contributions also help cover the out-of-pocket maximum over time.
What does a Medigap plan cover?
The best way to determine what a Medigap plan covers is to review the policy documents and disclosures for a specific plan option. Supplemental plans set their own terms and cover various services at different rates. These plans can also provide additional coverage beyond Medicare, such as extended coverage for more days in a hospital before long-term care is needed. Skilled nursing care and other expenses, such as foreign travel exchange services, may also receive full coverage or coverage at a percentage rate.
Medicare coverage only extends to dental care and vision services of certain types in specific situations. Medigap coverage does not step in and cover these services in place of Medicare. Third-party supplemental insurance or cash payments would be required to meet those needs.
What obligations are there with a Medigap plan?
Like any health plan, Medigap insurance requires regular payment from the insured for the plan to stay active. Supplemental plans may also feature deductibles at various levels depending on the plan purchased and can even qualify as a high-deductible health plan, CMS reports.