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Medigap Insurance: Covering All of Your Bases

Medigap is a type of private health insurance meant to supplement the coverage offered by Medicare. Medigap insurance will help pay your share of Medicare-covered services, including copayments and deductibles. Some policies offer coverage for expenses Medicare will not cover, but this varies by policy. The federal government sets minimum standards that Medigap policies must meet. In addition, states also set standards that must be met by any insurance company seeking to sell Medigap policies in their state.

Under federal law, insurance companies are required to sell standardized Medigap policies. This means that no matter what insurance company you decide to use, they all are required to offer a certain set of benefits in their Medigap policies. There are 12 different types of Medigap policies. Insurance companies are not required to offer all 12 types, and may choose which ones they will sell. Also, the insurance companies are not required to offer these policies at a set price, making it important to compare insurance companies prior to purchasing one.

In order to be eligible for Medigap insurance, you must be enrolled in Medicare Part A and Part B. This means that you will be responsible for paying the premiums not only for your Medicare Part B coverage, but also for your Medigap coverage.

It is important to note that there are no joint Medigap policies, and your policy will not offer coverage for your spouse. If you are married, your spouse will need to have his or her own Medigap policy.

Unless you purchased your Medigap coverage prior to January 1, 2006, you will not be able to get prescription drug coverage as part of your policy. However, you may enroll in Medicare Part D, which offers this coverage.

Medigap polices have guaranteed renewal. This means that unless you have stopped paying your premiums, your Medigap insurance company may not drop you from coverage. However, if you purchased your Medigap policy prior to 1992, it is possible that your insurance company can drop you from coverage. If this happens, you will need to find a new Medigap insurance provider.

The best time to purchase Medigap insurance is during open enrollment. This six month period begins once you are 65 or older and have enrolled in Medicare Part B. It is essential to enroll in Medigap during open enrollment because during this time:

  • The insurance company may not refuse to sell you any of the Medigap policies it offers
  • The insurance company may not charge you more for the policy because of any health problems you have
  • The insurance company cannot require you to wait a certain period of time before coverage begins, unless you have a pre-existing condition

If you have a pre-existing medical condition, the insurance company can make you wait up to six months before it will begin covering expenses associated with the condition. This waiting period may be waived or shortened if you had “credible coverage” prior to applying for Medigap. This generally means that there was not a break in your health insurance coverage for more than 63 days.

It is essential that you research all of your available options before choosing a supplemental insurance policy. You should consider the coverage, the costs and the overall benefits and detriments to you. There are other supplemental insurance options besides Medigap to help take care of your medical costs, including Medicare Part C, also known as Medicare Advantage plans. These plans, which are usually HMOs or PPOs, also are offered by private insurance companies.

Preparing to Meet with Your Estate Planning Attorney

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