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Understanding Medigap Insurance Choices Posted: April 17th, 2010

By Maryalene LaPonsie

Maryalene LaPonsie

For those older than 65, and younger individuals with certain disabilities, Medicare offers free health insurance. Instituted in 1965, Medicare and its companion, Medicaid, revolutionized the way health care is delivered in the United States.

While Medicare provides comprehensive coverage for a variety of medical needs including hospitalization, long term care and prescription drugs, the program is not all-inclusive. Many find that a Medigap insurance policy provides cheap health insurance that fills in the gaps for services not covered by Medicare.

With so many plans and plenty of technical jargon, navigating Medigap plans can be confusing--it is easy to feel as though you've wandered into uncharted territory. Here is an overview of Medigap plans that may help you cut through the medical maze.

How Medigap Works

While Medicare is government-run free health insurance, Medigap is offered by private health insurance companies. You can buy Medicare supplemental insurance, or Medigap, to help pay for services not covered by Medicare. For example, Medigap policies may help you pay for copayments, co-insurance, and deductibles.

Although Medigap is offered by private companies, federal and state laws stipulate exactly what type of coverage you receive. In most states, Medigap can only be sold under standardized plans that are identified as Plans A-N. The benefits in each plan are the same, so when you compare supplemental health insurance quotes price is the only difference between plans.

For example, Plan A benefits from one health insurance company are exactly the same as Plan A benefits from another insurer. Shopping for Medigap insurance can be easy because you don't have to review confusing benefit charts or complex plan details. You just have to make sure that the plan is identified as Medicare supplement insurance and then chose the cheapest health insurance.

However, there is one important exception to this rule. If you live in Massachusetts, Minnesota, or Wisconsin, your state offers different standardized plans. For more information on Medigap policies in your area, contact your state insurance office.

What Medigap Covers

As mentioned before, cheap health insurance through Medigap can cover expenses not paid by Medicare. These expenses may include:

  • Medicare co-payments
  • Medicare co-insurance
  • Medicare deductibles
  • Emergency care outside the United States
  • Preventative care not covered by Medicare
  • Hospice cost-share

While it is important to know what Medigap insurance covers, it is also important to know that it does not pay for all medical expenses. Medigap insurance does not cover:

  • Long term care in a nursing home or assisted living setting
  • Vision services, including eyeglasses
  • Dental care
  • Hearing aids
  • Private duty nursing

How to Choose the Right Medigap Policy

While each Medigap plan offers the same benefits, you need to select the plan that fits your medical needs. The chart below reviews the basic benefits for Medigap Plans A-L. Plans N and M are new in 2010 and offer similar benefits as Plan D.


Before purchasing a Medigap plan, you should first determine the benefits that you need. For example, consider the following:

  • Do you frequently travel abroad?
  • Do you have an illness requiring frequent blood transfusions?
  • Do you anticipate needing any skilled nursing?
  • Are you interested in using hospice for end-of-life care?
  • Do you have an illness or a family history of illness that may require hospitalization?
  • Do you need any mental health services?

To determine whether you need coverage for Medicare Part A and Part B coinsurance and deductibles, remember:

  • Free health insurance through Medicare Part A does not provide any benefits for home health care and covers only 20% of the cost of durable medical equipment, such as oxygen machines
  • Free health insurance through Medicare Part B requires co-payments on all hospital outpatient services. In addition, you must pay 20% co-insurance for most services except mental health services, for which you have to pay 50% of the total health care bill

One you know which benefits you would like covered, it is time to begin comparing health insurance. Many insurance companies offer Medigap coverage and provide free health insurance quotes.

2010 Changes to Medigap Insurance

As you search for the cheapest health insurance, be aware of several changes to Medigap insurance that will be implemented on June 30, 2010:

  • Plans E, H, I, and J will no longer be sold after May 31, 2010. If you want one of these plans, don't delay in requesting supplemental health insurance quotes
  • Benefits for Plans D and G will change after June 1, 2010
  • Hospice coverage will be added as a basic benefit for all plans. Plan K continues to cover these services at 50%, while Plan L offers a benefit of 75% the cost
  • Plans K, L, and N require that you pay a portion of your Part B co-insurance and co-payments. While this does reduce benefits, it also makes cheap insurance easier to find
  • New Plans M and N will be offered. Plan M is the same as the current Plan D, but requires that you pay half your Medicare Part A deductible. Plan N is also the same as the current Plan D, but it requires that you pay $20 per physician visit and $50 per hospital visit

For the cheapest health insurance, ask for quotes from several companies. You should also ask if the premiums may increase each year because of inflation or your age. Once you find the Medigap policy that offers cheap insurance to meet your needs, fill out an application to begin your coverage.

Maryalene LaPonsie