Medigap Plan – significantly increases the policyholder’s choice in selecting the most appropriate health care professionals in their area and thus enhances declining autonomy and independence while reducing expenses.
You should know what you need to do if you decide to switch your Medigap plan or if you decide to buy one. I’ve focused on the main differences between the plans and how to get them while including some extra information for reference. This article is intended to help you get the most out of it by helping you determine which plan is best for you.
Eligibility for Medigap Plan N
- If you or your spouse has paid Medicare taxes for at least ten years.
- Must have a Medicare Supplement policy in force for at least six months.
- The insurance company must approve you for Plan N within 60 days of your application.
- You can’t have any other Medicare supplement policy in force.
Why do you need one?
When you’re healthy and don’t need insurance, you’re at an advantage. You shop around for the lowest price, you take advantage of every good sale, and you join every discount program you can find. But Medicare isn’t like health insurance. It typically covers only about 80 percent of your medical bills. And if you have a serious illness, it can send you into debt.
If you’re healthy, you may not need Medigap, but if you’re older and worried about how you’ll pay your bills, you want one. Medigap Plan N (short for Medicare Supplement insurance) is insurance you can buy from a private company. It fills the money Medicare doesn’t pay.
Medigap Plan N limits
The conventional wisdom is that Medigap Plan N limits are a good idea because they give seniors the peace of mind of knowing that Medicare will pay for their medical bills. Medigap Plan N doesn’t limit anything. All it covers is Medicare’s 80-per cent share of your medical bills. The 80-per cent limit on what it says wouldn’t matter at all if Medicare were free. But it isn’t. Medicare’s actual cost is more than 80 percent. So Plan N’s 80-per cent limit has the effect of increasing the Medicare bill by about 20 percent, or $1,500 a year per person.
Protection from Insurance Co-pays
There are three kinds of insurance co-pays.
- The coinsurance. This is the amount you have to pay over and above your premium. For example, you might have a co-pay of $10 for every $50 of covered costs.
- The deductible. This is the amount you have to pay before your insurance starts paying. For example, you might have a $400 deductible for each medical visit.
- The co-pay. This is the amount you have to pay every time you have prescribed a drug or go to an emergency room.
Medigap is often called “Medigap” because it fills in the gaps left by the insurance that Medicare provides. It is not insurance, however, because, unlike health insurance, it doesn’t pay for anything other than Medicare-covered expenses.
Most seniors with Medigap pay for their coverage out of their own pockets, but some people get help from Medicaid or employer-sponsored health insurance. For these people, Medigap is a substitute for that insurance.