Medigap Insurance, often referred to as Medicare Supplement Plans, underwent significant changes as of June 1, 2010. Medigap, the health insurance plan designed to cover deductibles and coinsurance Medicare recipients are obligated to pay when accessing health care services, just had a major makeover. Several plans were eliminated and new ones added.
Medigap plans E, H, I, and J have been eliminated. These were called the “Preventive Care Benefit” and the “Home Recovery Benefit” plans. Added are the M and N plans, although it is not certain that all companies will offer the new ones. Nevertheless, hospice care benefit has been added to all new Medigap plans.
The new N plan has similar benefits to plan D except there is a $20 copayment for doctor visits and $50 copayment for emergency room visits. These co-pays apply after the $155 deductible is paid. The new Plan M also offers similar benefits to Plan D, but will only cover 50% of the Part A deductible and none of the Part B deductible. The cost of Plan N is around 70% of the cost of Plan F. And, the cost of Plan M is approximately 85% of the cost of F. Overall the number Medigap plans have been reduced from 12 plans to 10 plans.
While Medigap is a supplement offered by private insurance companies to fill the gaps in original Medicare Part A and Part B, Medicare Advantage are offered by a private company with contracts with the government to implement your Medicare benefits. You still must maintain Part A and Part B and continue to pay the Part B premium when you choose a Medicare Advantage Plan
With the changes affecting the Medicare Advantage Plans, including the cutting of fees and mandatory loss ratios, less benefits will be offered to Medicare Advantage members. As an example, you may pay less for a Medigap plan than for a Medicare Advantage Plan if you choose Medigap plan N. Moreover, the Medigap Plan N will not have network restrictions, restrictive enrollment periods, and, no out of pocket costs for hospital stays among other features. Keep in mind, however, that Medigap does not include prescription coverage while there are Medicare Advantage Plans that does. With a Medigap plan, you have to purchase stand-alone part D prescription coverage.
Before making a choice, you need to explore your options in depth with an agent who can help you navigate this complicated insurance maze.