insurance

All about Medigap insurance coverage

Lifesaver
Highlights
  • Know your out-of-pocket costs under Medicare to assess Medigap needs.
  • Medigap pays all of Part A co-insurance and a portion of Part B costs.
  • In June, only two Medigap plans will pay all of Part B excess charges.

If you just turned 65 -- or will get there sometime this year -- and you will be enrolled in Medicare Part B, this is the ideal time to shop for Medicare supplement insurance. Also known as Medigap insurance, these policies are sold by private insurance companies to fill in some gaps in the health care coverage you get from Medicare.

During a six-month open enrollment period that begins on the first day of the month in which you are 65 or older and enrolled in Medicare Part B, your right to purchase Medigap insurance is guaranteed, no matter the condition of your health. You also can't be required to pay more for coverage of certain health conditions during open enrollment. This was true long before President Barack Obama signed the health care reform bill into law.

Your first step in assessing your Medigap insurance needs is to understand your out-of-pocket costs under Medicare. These expenses range from your deductible, co-insurance and co-payments under Medicare Parts A and B to the cost of blood.

The health care reform will bring some additional preventive care benefits under Medicare. For example, starting in 2011, enrollees will receive free annual wellness visits and will no longer incur co-payments for cancer and diabetes screenings.

ABCs of Medicare

Medicare Part A covers inpatient hospital care, skilled nursing facilities and some home health care. The benefits start once you've paid your Part A deductible, which for 2010 is $1,100 for the first 60 days of hospitalization, plus an additional $275 per day for days 61 through 90 and $550 per day for days 91 through 150. You are responsible for all costs beyond 150 days.

Medicare Part B is an optional premium-based plan that covers physician services and outpatient hospital care. You must be enrolled in Part B to be eligible to purchase a Medicare supplement plan. For new enrollees in 2010, the Plan B monthly premium is $110.50 for individuals earning $85,000 or less and couples earning $170,000 or less. Those with higher incomes pay Part B premiums ranging from $154.70 to $353.60 per month.

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"Because (the Part B premium) gets withdrawn from (your) Social Security (check), many people aren't aware of it, but it's certainly part of the total expense that you're paying for your health care," says Heidi Michaels, a senior specialist with the Dyste Williams insurance agency in Minneapolis.

 

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