Medigap Plans

Medicare Supplement Plans

Medigap Plans

Medigap plans are insurance policies that cover what Medicare Part A and Part B do not. While Medicare is a wonderful program that helps retired people pay for their healthcare costs, it was not designed to cover all health services and necessities. For example, Medicare does not pay if you should be on vacation in a foreign country and need some form of medical treatment. As well, Medicare does require some copayments and coinsurance. This is where choosing a Medigap policy can help.

The co-pays and deductibles that you as a Medicare recipient are responsible for can add up to thousands of dollars in some instances. This type sudden expense can be a terrible burden to those living on a fixed retirement income. Purchasing a Medigap insurance plan alleviates the stress of this type of situation. By paying an affordable monthly premium, you will have the peace of mind to know that even if you should incur a large deductible, you will be covered. There are also some Medigap plans that include coverage for foreign health services.

Medigap plans are regulated by state and federal guidelines. Therefore, all Medigap policies must include the same basic coverage no matter which insurance company is selling the policy. While these mandatory coverage’s may vary from state to state, they do not vary from company to company. However, an insurance company does have some leeway in how much their monthly premiums will be.  Therefore, it is important to compare the same plan being offered by different companies within your state. You may choose a more expensive premium based on the superior customer service or excellent reputation of one insurer over another. However, the base coverage is the same between all companies.

Medigap rates may be charged based on one of three different rating criteria. The first of these is the “Issue-Aged-Rated” premium. This rate is based on the age you are when your policy is issued. Premiums tend to be low if you enroll at a younger age and will not go up as you get older due solely to your age. Inflation and other factors may cause your premium to go up, however.

The second rating is “Community-Rated” policies, in which premiums are the same for all policy holders regardless of age. Again, outside factors like inflation may cause premiums to go up, but this would never be age related.

The “Attained-Age-Rated” policies are based on age and do go up as you get older. These may start off low if you buy them when you are young, but tend to increase greatly as you get older.

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