Learn How Medigap Plans Supplement Your Medicare

When you are about to face retirement, having a basic understanding on how Medicare works can give you better health care and reduce what you spend on medical services. Although the U.S. Department of Health and Human Services is in charge of Medicare, the Centers for Medicare and Medicaid Services is the department that administers Medicare and applications go through the Social Security Administration. When you apply can be critical. That’s because if you don’t sign up when first eligible, you could have to pay higher premiums for late enrollment. That’s not the only way to save your health care dollars, though.

The Part A of Medicare that covers certain hospital expenses is free for most people. It can help with inpatient hospital care, inpatient care at skilled nursing facilities, home health care services and even hospice care.

Unlike Part A, Part B is not free, but you are not required to buy it. It helps with doctor care, home health care, lab tests, outpatient care and other services from non-hospital providers. Part B covers 80 percent of a pre-determined amount that Medicare sets for every doctor service. Doctors are free to accept Medicare’s rates for services or charge more. If your doctor charges more, you’ll be responsible for the 20 percent that Medicare doesn’t cover of the pre-determined amount plus any excess.

Medicare Part C refers to an alternative to Medicare. Known as Medicare Advantage Plans, poilcies from private insurance companies have be used to replace both Part A and B if Medicare Advantage Plans are available where you live. Even if you chose Medicare when you were first eligible, you have an open enrollment period each year when you’re allowed to change your mind. This year, you can switch to a Medicare Advantage Plan between October 15 and December 7.

Medicare Advantage Plans cover the same health care that Medicare does and usually add coverage for some prescription drugs. Unlike Medicare Supplemental Insurance (also known as Medigap Plans), Medicare Advantage Plans are not standardized to offer the same coverage. You’ll need to check each plan to be sure what is covered, and what rules apply to your benefits.

Like Part B, Medicare Part D is optional. It covers prescription drugs and is available for Medicare beneficiaries who have Medicare Part A or Part B. Also like Part B, the Prescription Drug plans have a monthly premium. Again, if you don’t enroll when first eligible, you may have to pay higher premiums as a late enrollment penalty, but you can sign up between October 15 and December 7, 2011. These private plans vary in cost and do not all cover the same medications. In addition, if you move outside of a plan’s service area, your coverage could be automatically dropped even for a temporary relocation.

Medigap Plans Are The Other Alternative

As the name implies, Medigap policies fill in the gaps of Medicare’s Part A and B coverage. Remember that Medicare only pays for 80 percent of doctors’ fees even if they accept Medicare. There are 10 different Medigap Plans and certain ones pick up that remaining 20 percent of doctor bills. If you need a specialist who charges higher rates than Medicare covers, certain Medigap policies will cover the excess charges, too.

To be able to get a Medigap Plan, you need to be enrolled in Medicare Part A and B. If you have a pre-existing health problem, better enroll during Medigap open enrollment when you cannot be charged higher premiums or be denied of coverage because of health problems. Open enrollment is the first six months when you are at least 65 and enrolled in Part B.

At present, you can choose from 10 different Medigap Plans with different benefits and rates, but three states have adopted slightly different forms of Medigap. Not all of the 10 conventional plans are available is every state, either. It’s easy to run online quotes when you have Internet access to see instantly which plans are available in your state. You can see the rates instantly, too.