If you’re unfamiliar with the concept of the Medigap, here are some of the basics you need to know about this Medicare supplemental insurance plan.
- Medicare supplemental health insurance plans are often called “Medigap” plans.
- Medigap plans cover the extra expenses that Original Medicare plans don’t cover.
- You need to purchase Original Medicare plans A and B before you’re eligible for a Medigap plan.
- Medigap is not the same thing as a Medicare Advantage plan.
Let’s go back to that third bullet point for a little while — the one about Medicare Parts A and B. (Sometimes they’re called “plans” and sometimes they’re called “parts,” but they ultimately refer to the same thing.) Because you’ll need to have both of these plans before you can even apply for Medicare supplement insurance, we want to go over what Plan A and Plan B actually entail:
What Is Medicare Part A? (Or, What Is Medicare Plan A?)
Plan A is all about covering hospital costs, nursing home costs, and hospice care. Part A is automatically included in your coverage when you enroll for Medicare.
What exactly does Part A cover? Hospital services that include semi-private rooms, meals, general nursing, and prescription drugs and/or supplies that are necessary for your inpatient treatment; nursing home care in a skilled nursing facility (SNF), hospice care, and home health services for medical therapies and treatments.
What are the costs of Part A? You won’t have to pay a yearly premium for Part A but you will have to pay a yearly deductible before Medicare will cover your hospital costs. According to Medicare.gov, the deductible for each benefit period in 2016 is $1,288. Medicare Part A pays for 80% of your hospital costs — but only for 60 days of hospitalization. If you’re hospitalized for more than 60 days, you’ll end up paying more out-of-pocket. (This is where Medicare supplement insurance plans come in handy, actually).
What is Medicare Part B? (Or, What Is Medicare Plan B?)
Medicare Part B addresses two other major healthcare services: medically necessary services and supplies to diagnose or treat a medical condition, and preventative health services. Part B is actually optional for Medicare recipients, meaning that you can opt out if you receive health insurance through a private insurer.
What exactly does Part B cover? Coverage typically includes early diagnosis tests for certain diseases; certain vaccinations; rehabilitation therapy; lab tests and X-rays; ambulance services; screenings for physical and mental illnesses; mental health services (both inpatient and outpatient); and some doctor visits.
What are the costs of Part B? You’ll have to pay a monthly premium for Part B, and this may vary depending on your income; the standard monthly premium (i.e., the lowest monthly premium) for 2016 is $121.80. You’ll also have to pay a yearly deductible of $166 in 2016, after which Medicare pays for 80% of approved services.
So if you don’t need it, is Part B actually worth it? It’s definitely a good idea to have Medicare Part B because it covers some of the most important preventative medical services for adults. It covers mammograms for breast cancer screenings, which women ages 65-74 are advised to have every two years. It covers your annual vaccine for the flu, which is often considered essential for adults over 65; according to The 2013 State of Aging and Health in America Report, the influenza virus and pneumonia combined are the seventh leading cause of death for elderly Americans. Part B can ever cover smoking cessation aids, and for the 8.4% of older Americans who still smoke, this can be incredibly useful.
And, of course, Part B actually is necessary if you plan on signing up for Medicare supplement insurance.
Wrapping It All Up:
There are clearly many caveats to Medicare coverage even when you have Plans A and B, and this is where Medicare supplement insurance is really helpful. Even for healthy individuals, supplemental plans can provide a great deal of support in the case of medical emergencies.
That wraps up our second installment of our Medigap guide. If you have any questions on Plans A and B, be sure to leave them for us in the comments section. Ger more information on this topic here.