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Choosing a Medigap Insurance Company

June 10, 2008 - 7:30am
 
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Choosing a Medigap Insurance Company


Medigap is private supplemental insurance for Medicare participants. It helps pay for some of the costs not covered by Original Medicare.

Basic Benefits

  • Hospital coinsurance for Medicare-covered hospital stays
  • Medicare-covered coinsurance for:
    • Medical services
    • Mental health services
    • All other Medicare Part B services
    • The first three pints of blood you might need for a transfusion in a given year

Extra Benefits

You can buy the following extra benefits for a higher Medigap premium:

  • Medicare Part A hospital deductible (Medigap Plans B through J)
  • Skilled nursing facility coinsurance (after 20 days, on Plans C through J)
  • Medicare Part B deductible (Medigap Plans C, F, and J)
  • Medicare Part B excess charges (Medigap Plans F, I, J, and G)
  • Foreign travel emergency (Medigap Plans C through J)
  • At-home recovery (Medigap Plans D, G, I, and J)
  • Preventive care/screening (Medigap Plans E and J)

Things to Consider

Choose one of the Medigap plans A-J. You should consider several factors beyond what is just covered. Here are things to consider before you choose a policy.

Your health

You may be in good health today, but think about your future.

Exclusions for pre-existing conditions

Some policies have a pre-existing condition exclusion. This means you are temporarily excluded from receiving benefits for any condition for which you have recently been treated. If you have a serious medical condition requiring costly treatment, consider a policy with a short exclusion period or none at all.

Affordability

Think about how much you can afford on a Medigap policy. Contact your State Insurance Department. They can tell you which insurance companies in your state offer the plan you’ve chosen. Compare the premiums of several companies. Try to find out how premiums will increase over time.

Check the method of pricing

Policies are priced (or rated) in several ways:

  • Attained age policies: tend to be cheaper at age 65, but prices automatically increase as you age
  • Issue-age-rated policies: charge a rate that’s based on your age at purchase, which doesn’t automatically increase with age
  • Community-rated policies: charge the same rate for everyone, regardless of age

Issue-age-rated policies and community-rated policies tend to be the best buys. At age 65, they will cost more, but they cost less as you age.

Limits of your benefits

Understand the limits on your benefits. Limits may be in the dollar amount paid for your treatment or on the number of days you are treated.

Reputation of the insurance company

Call your State Insurance Department to check the reputation of the insurance company before you purchase a policy. Make sure that the insurance company is licensed in your state. Check the financial soundness and stability of the company. Choose an insurance company with a rating of A or better.

Duplicate coverage

Duplicate coverage is expensive and generally not needed. A single comprehensive policy is usually better than duplicate coverage. It is against the law for an insurer to sell you a second Medigap policy. If you want a second Medigap policy, you must state in writing that you want to cancel the first policy after the second policy goes into effect.

Automatic claims filing

Find out if the Medigap insurer has arranged for Medicare to automatically file your Medigap claims. This service can save you time and frustration.

Medical history

Your medical history is important on an insurance application. Do not leave out any of the medical information requested. If you do, the company could deny coverage for any medical condition you failed to mention. They could even cancel your policy.

Resources

American Association of Retired Persons (AARP)
http://www.aarp.org

References

Centers for Medicare and Medicaid Services. 2006 choosing a medigap policy: a guide to health insurance for people with medicare. Available at: http://www.medicare.gov/Publications/Pubs/pdf/02110.pdf . Accessed March 4, 2007.



Last reviewed February 2007 by Janet H. Greenhut, MD, MPH

Please be aware that this information is provided to supplement the care provided by your physician. It is neither intended nor implied to be a substitute for professional medical advice. CALL YOUR HEALTHCARE PROVIDER IMMEDIATELY IF YOU THINK YOU MAY HAVE A MEDICAL EMERGENCY. Always seek the advice of your physician or other qualified health provider prior to starting any new treatment or with any questions you may have regarding a medical condition.

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