COMMENTARY: Mind the gap: Supplemental insurance will cover what Medicare doesn't

Tuesday, December 4, 2012

WASHINGTON, D.C. -- Every day, another 10,000 baby boomers turn 65 and qualify for Medicare. As welcome as the health care coverage is, many soon discover it comes with gaps.

What the government pays in benefits doesn't always cover what the doctors and hospitals charge. People with traditional Medicare must pay deductibles and often 20 percent of the cost of their doctor visits and tests. Those out-of-pocket expenses can add up.

To protect themselves, many beneficiaries buy supplemental coverage from private insurers. The "Medigap" insurance, as it's called, helps fill the gaps that deductibles, co-payments and coinsurance leave. It makes out-of-pocket costs more manageable.

Not everyone should consider buying a Medigap policy. You don't need to supplement your Medicare coverage if you're on Medicaid or signed up for a private Medicare Advantage plan or enrolled in a group health plan through an employer or former employer.

But about 20 percent of beneficiaries do add a Medigap plan to their traditional Medicare coverage.

The best time to purchase a supplemental policy is within six months of turning 65 and enrolling in Medicare's Part B medical insurance. During that time, insurers can't refuse to sell you a policy, or charge you more than other people, because of a health problem.

If you try to buy after those six months, there's no guarantee an insurer will cover you.

There are 10 kinds of Medigap plans, so that you can choose which gaps you'd like to fill. Each plan is labeled with a letter, from A to N. All insurers selling a particular kind must offer the same package of benefits. You can visit www.medicare.gov to learn the details of each.

All 10 supplemental health plans cover these basic benefits: the coinsurance for extended hospital stays, the coinsurance for doctor visits and outpatient services, the coinsurance for hospice care, and the cost of the first three pints of any blood you might need.

Beyond those fundamental benefits, different Medigap plans pay for other out of-pocket expenses, like the coinsurance for skilled nursing care, the hospital deductible, the outpatient deductible, and the cost of medical emergencies while traveling outside the country.

Each Medigap plan charges a premium on top of Medicare's Part B premium. And, although insurers must offer the same benefits within a certain kind of plan, there can be big differences in their premiums. So it's smart to shop around for the best price.

One note of caution: Medigap insurance doesn't plug all the holes. It's not a way to pay for long-term custodial care, dental care, eyeglasses or hearing aids. And new Medigap policyholders need to buy separate drug coverage under Medicare's Part D if they want it.

Still, for many people, adding a Medigap plan to traditional Medicare coverage can make out-of-pocket health care expenses more predictable and easier to budget.

If you're interested in supplemental insurance, here are four steps to follow:

* Decide which benefits you want and what kind of Medigap plan meets your needs. Besides checking www.medicare.gov for an overview of benefits, you may call Medicare at 1-800-633-4227 and request a free copy of the Medicare publication, "Choosing a Medigap Policy."

* Find out which companies sell Medigap policies in Arkansas. Visit www.medicare.gov/medigap for a comparison of supplemental plans. Or call the Arkansas Department of Insurance at 1-800-224-6330.

* Do some research on the insurers that interest you. Compare premiums, since they will differ company by company. But also check the companies' customer service. The State Department of Insurance will have a record of consumer complaints against particular insurers.

* Buy the policy that best fits your needs from an agent you trust. Read your policy as soon as you receive it. If you're not satisfied, you have 30 days to return it and get a full refund. Otherwise, you can keep your insurance as long as you pay your premiums.

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Bob Moos is Southwest public affairs officer for the Centers for Medicare & Medicaid Services in Washington, D.C.