The ABCs of Medicare: Medigap
Editor's note: This is the second in a series of three stories on Medicare. The first part compares the relative benefits of original Medicare and Medicare Advantage. The third part looks at prescription drug plans.
If you decide to go with original Medicare, then you really need to consider purchasing Medicare supplement insurance (sometimes referred to as Medigap or Medsup). These policies are purchased from private insurers, but coverage is standardized across a choice of 12 plans, labeled A through L. Plans cover gaps such as deductibles, hospital co-payments, and the 20% physician co-insurance not covered by Part B.
The table below outlines the different coverage for each of the plans. Plans C and F, which average roughly $1,900 a year in premium, are the most popular. They both include the Part B deductible, and plan F includes coverage for excess charges above Medicare rates. Two new plans, K and L, were introduced in 2006 as lower-cost options, but there's a catch: You will be responsible for a larger portion of your medical bills compared with the other plans.
Comparison of Coverage of 12 Standard Medigap Plans
|Part A Hospital||X||X||X||X||X||X||X||X||X||X||X||X|
|Lifetime Reserve Days (91-150)||X||X||X||X||X||X||X||X||X||X||X||X|
|365 Life Hosp. Days-100%||X||X||X||X||X||X||X||X||X||X||X||X|
|Parts A and B Blood||X||X||X||X||X||X||X||X||X||X||50%||75%|
|Part B Coinsurance-20%||X||X||X||X||X||X||X||X||X||X||50%||75%|
|Skilled Nursing Facility||X||X||X||X||X||X||X||X||50%||75%|
|Coinsurance (Days 21-100)|
|Part A Deductible||X||X||X||X||X||X||X||X||X||50%||75%|
|Part B Deductible||X||X||X|
|Part B Excess Charges||100%||80%||100%||100%|
|Foreign Travel Emergency||X||X||X||X||X||X||X||X|
|Non-Medicare Covered Preventive Services||X||X|
|Annual Out-of-Pocket Limit||$4,140||$2,070|
|Source: TheStreet.com Ratings|
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