What Is Medigap Insurance and Is It Actually Worth It?

If you qualify for Medicare, you’ve probably heard a lot about your insurance options. Part A, Part B, Part D, Medigap, and more — it’s enough to make anyone’s head spin.

Understanding the various choices available to you is an essential part of ensuring your health needs are met. So what is Original Medicare and Medigap? Is a Medigap plan a good choice for you?

Let’s take a look at what Medigap insurance is, what it doesn’t cover, and if it’s the right choice for you.

What is Medigap?

Original Medicare is made up of two parts. Part A is inpatient hospital insurance and also covers care in a skilled nursing facility, hospice, home health care, and nursing home care.

Part B is more like regular medical insurance. You use Part B when you visit the doctor for medically necessary and preventive services.

However, over time users found that there were “gaps” in Medicare. For instance, there are various copayments, coinsurance, and deductibles that have to be met. Medigap is additional insurance coverage that can help meet those needs.

Medigap policies allow you to keep your Original Medicare coverage while getting assistance with coinsurance and copayments. Private insurance companies sell these policies, and they are guaranteed renewable as long as you pay the premium.

What Medigap Doesn’t Cover

Medigap is not a replacement for Original Medicare, so it doesn’t add additional coverage. For instance, a Medigap policy will not help you pay for vision or dental care.

You also won’t get coverage for prescription drugs from Medigap. You’ll need to purchase a Medicare Part D policy for that. Private nursing, long-term care, and hearing aids are also not covered.

The primary purpose of Medigap is to help you manage the costs of original Medicare. It focuses on helping pay for coinsurance and copayments so you can afford the care you need.

Do you really need additional coverage?

You’re already paying for health insurance, so you might balk at having to pay more for insurance. The thing is – you might not have enough coverage.

Your first port of call would be to analyze what you are already covered for, and how much your insurer will cover in the event you need medical treatment. You can quickly do this by analyzing your insurance card, which contains information on what your group health plan is (known as Rx Grp), whether your prescription will be covered (known as PCN) etc. Here’s a great resource on what Rx Bin, Rx Grp and other acronyms mean on your insurance card.

Then you can cross reference that information with your policy documents or speak with your insurance agent to get a full picture of what you’re covered for, and where the gaps are. Usually, if you have an insurance agent, they will be able to do this analysis for you. It gives them an extra chance to earn commission if you increase your coverage.

Medigap vs. Medicare Advantage

The biggest choice to make with Medicare is whether you want to get a Medicare Advantage plan or stick with Original Medicare and get a Medigap policy.

Medicare Advantage replaces Original Medicare. It may provide various benefits you don’t get with Original Medicare, such as vision, dental, and prescription coverage.

However, there are disadvantages as well. For example, you’ll have to stay within your insurer’s network of doctors, where Original Medicare allows you to see any provider that accepts Medicare.

If you want to keep Original Medicare — for instance, if you plan to travel and won’t be able to stay within a medical network — Medigap is the best option. You can find affordable Medigap plans on the Medicare Wire website and compare the various plans easily.

Is Medigap Insurance Worth It?

For those who want to keep Original Medicare, Medigap is a great way to keep your medical expenses affordable.

Medigap insurance can help you maintain your Original Medicare coverage while paying less for coinsurance and copayments. You don’t have to worry about how much 20% of a procedure is when Medigap is there to help.

We hope this article helped you understand Medigap coverage. If you’re interested in learning more about personal finance and managing your money, check out other articles on our blog!