Medigap plans cover medical costs which are not covered by Medicare Parts A and B.
There are a variety of Medigap plans, each of which provides different benefits.
When Medigap policies first started, there was a confusing jumble of coverages that led to abuse of people covered by Medicare. In order to provide standardization, Federal law provides that there are standard Medigap plans, each of which is known by alphabet letters. (Three states are exempted from federal standards: Massachusetts, Minnesota and Wisconsin, each of which offer their own standard plans.)
Each of the plans offers a different mix of benefits.
Under federal law, any company offering any plans must offer Plan A which includes several core benefits which are contained in all the Medigap policies.Some states mandate other plans be offered. Not all carriers offer all plans in all states.
To see a chart that describes the benefits of the various federal Medigap plans, click here.
Part B: Excess Medical Charges: This benefit pays for the excess over the Medicare Approved Amount that doctors who do not accept Medicare assignment are permitted to charge, usually up to 15% over.
For example, a doctor who does not accept Medicare assignment charges $250 for a procedure. The Medicare Approved Amount is $200. The payments would be:
- $160 by Medicare (80% of the Medicare Approved Amount of $200).
- $40 would be paid under the Basic Benefits portion of each of the ten Medigap plans (20% of the Medicare Approved Amount of $200).
- $30 by Plans F, I, or J since they pay 100% of the 15% over the Medicare Approved Amount due because the doctor did not accept Medicare assignment.
- $24 by Plan G (which is 80% of the excess).
- NOTE: $230 (the Medicare Approved Amount plus 15%) is the most the doctor can bill so no one owes the difference between the $230 and the $250 that the doctor billed. The doctor cannot collect that difference.
Preventive Care: Pays up to $120 per year for preventive health care and screening such as cholesterol screening, hearing tests, thyroid function tests, and annual physical exams.
Prescription Drugs: Plans H,I and J cannot be offered with drug benefits.
High Deductible Option: You have the option to pay lower premiums and purchase Plans F or J with a $1,500 annual deductible. This is in addition to any other deductibles such as the Prescription Drug deductible ($250) and the Foreign Travel Emergency deductible ($250). Also the deductible may rise with inflation in future years.