Traditional Medicare provides you coverage from doctors and hospitals throughout the U.S. But, you could have significant out-of-pocket costs–deductibles and coinsurance–if you need a lot of care. You should protect yourself from these costs and fill gaps in Medicare in one of three ways: Medicaid (including Medicare Savings Programs administered through Medicaid), retiree coverage, if it’s available to you or, if not, a Medicare supplemental insurance “Medigap” plan that you buy in the individual market.
- Enrollment: You should sign up for a Medigap plan through a private insurer at the same time you enroll in traditional Medicare so that you are fully covered for medical and hospital care. (Your local area agency on aging, www.eldercare.gov, can provide you with a list of Medigap insurers in your state.) If you wait to buy Medigap insurance, you might not be eligible to get it right away. If you are in a Medicare Advantage plan, Medigap is of no use and you should not have it.
- Choice: You have a choice of many different Medigap plans lettered A through N. Every plan covers basic gaps in traditional Medicare coverage, including gaps in medical and hospital coverage and 365 days of additional hospital coverage. Plan A is the most stripped down of the plans. Other plans fill additional gaps. Most people do well buying Plan C, which covers all your basic needs. Plan F is also popular and covers a little more.
- Standardization: With Medigap coverage, the gaps filled by plans A, B, C, D, F, G, K, L, M, N, will be the same no matter which insurer you buy the coverage from. (Of note, these lettered plans are different from Medicare Parts A, B, C and D.) These plans can be compared on price alone.
- Premiums: Premiums can be based on the age at which you buy the policy (issue-age rated), your current age (attained age-rated) or the cost of providing the coverage to everyone in your area (community-rated). Community-rated premiums will be the same for everyone in your area no matter what age you buy the policy. Keep in mind that the lowest priced policy today might not be the lowest priced policy over time.