Senior citizens have their basic medical needs taken care of by Medicare. This program is funded or subsidized by the federal government, there are no monthly premiums for most plans. For some plans or situations, you may have to pay a nominal premium. Medicare Part A and Part B covers hospitalization and outpatient medical expenses.
Need for Medigap Policy
Medigap policies are actually supplementary insurance policies for Medicare Part A and Part B. They are also referred to as Medicare Supplementary plans. The two main reasons as to why you should consider a Medigap policy are as follows –
- Medicare Part A and Part B leaves out some benefits or offers a limited coverage for many benefits. That is why you need a supplementary plan to extend your Medicare coverage. Medigap does that for you. You can use your Medigap benefits after you have used up your Part A or Part B benefits. Medigap plans offer coverage of foreign travel medical emergency costs, Medicare does not.
- Original Medicare plans have very low or no monthly premiums, but, there are significant out-of-pocket expenses which you have to pay with the covered benefits. Medigap plans cover these extra costs totally, most of the times.
For these reasons, Medicare Supplement is also called Medigap, since it fills the gaps of Medicare Part A and Part B – gaps in coverage or costs. You can only use Medigap to supplement your Original Medicare plans not Medicare Advantage. You are not allowed to use Medicare Advantage and Medigap plans together. Though Medigap plans are managed to a large extent by the government, they are not sold by the government. These have to be bought from private insurance companies who have been permitted by Medicare to sell these plans.