When you purchase a car, gap insurance is one of the coverages that you want to make sure that you have as a part of your finance package. This insurance provides coverage for the difference between your auto loan and the depreciated value of the vehicle if your car is in an accident or stolen. I cannot stress enough the importance of having this in place just as you should with ensuring that your physical wellbeing would be taken care of through having complete Medicare health insurance coverage. This would be needed to financially address any medical occurrence, including emergency travel and care.
A Medigap Plan, also known as a Medicare Supplemental Plan (MSP), gives you the difference or makes up the gap in coverage that you may need. It is not covered under Original Medicare Part A and Medicare Part B. It helps with out-of-pocket expenses including a Medicare Part B deductible, Medicare Part A coinsurance, doctor’s office visit co-payments, and skilled nursing facility care.
What are the differences between the two plans? While Medicare is a federally funded program, Medigap and Medicare Advantage are insurances sold by private companies. A Medigap Plan and a Medicare Advantage Plan are both ways to obtain Medicare benefits. A Medigap Plan only supplements your original Medicare Part A and Medicare Part B benefits. On the other hand, a Medicare Advantage plan provides coverage within Part C of Medicare. Most of your Part’s A and B will be covered by the Medicare Advantage plan, not by Original Medicare. The difference between Original Medicare and a Medicare Advantage plan can also be in how much you pay out-of-pocket, can lower co-payments, coinsurance, and have smaller deductibles.
The plan that you enroll in should be based on your budget and healthcare needs. To qualify for a Medigap plan, you must have enrolled in Original Medicare Part A and Medicare Part B. If you enrolled in a Medicare Advantage plan, you would still have Original Medicare in place. This includes hospice care and hospice benefits. There are several types of Medicare Advantage plans that offer different kinds of coverage. To start, below are three of 12 different plans that are most popular based on the type of coverage that is offered.
|Benefits||Plan C||Plan F||Plan G||Plan N|
|Medicare Part A Deductible (annual)||•||•||•||•|
|Medicare Part B Deductible (annual)||•||•||•||•|
|Medicare Part A Coinsurance||•||•||•||•|
|Medicare Part B Coinsurance or Co-pays||•||•||•||•|
|Medicare Part B Excess Charges||•||•||•||•|
|Foreign Travel Emergency||•||•||•||•|
An excess charge occurs when you have Original Medicare, and the amount the health care provider is allowed to charge (based on Medicare-approved amounts) is greater. The difference is called an excess charge. Plan F takes care of the excess charge. However, with Plan C it becomes the beneficiary’s responsibility when you receive health services.
As you can see, Medicare Supplement Plan F has the best coverage. To be eligible for Plan F, you must have enrolled into Original Medicare before 2020. Plan F completely covers your out-of-pocket costs for both Medicare Part A and Medicare Part B. I recommend speaking with a plan provider to see if you qualify. This plan is considered to have the highest monthly premiums. Medicare Supplement Plan G is an option if Plan F is not, but be aware, if you join the Medicare Supplement Plan G, you will be responsible for the Medicare Part B annual deductible. However, once the deductible has been met, like Plan F, it will completely take care of out-of-pocket costs.
When should you sign up for Medicare Part B? You’ll want to sign up as soon as you are eligible during the initial enrollment period. This would be three months prior to the date that you turn 65, including your birthday month, and no later than three months following your birthday month. This gives you a seven-month period to enroll. For example, if your 65th birthday is October 7, then your period of enrollment begins July 1 (three months prior to your birthday month), your birthday month, and January 30 (three months after your birthday month).
Did You Know?
To control the rising costs of Medicare, and as part of The Medicare Access and CHIP Reauthorization of 2015, anyone who becomes eligible for Medicare on January 1, 2020 or later won’t be eligible to purchase Plan F, high deductible Plan F, or Plan C. If you had these plans prior to 2020, you can still keep them. Congress believes that the more people who must pay for the Part B deductible before seeing a doctor, it will limit unnecessary visits and help lower costs.
In my next article, I will discuss more about the 12 different Medigap plans. Stay tuned.
If you have questions or would like to read about a specific healthcare topic, please email your questions to [email protected] I look forward to your engagement.