How to Understand Medigap

Understanding your standard health insurance plan is complicated enough. When you throw additional health insurance into the mix, it can become a headache. For traditional Medicare enrollees, understanding how Medicare supplemental insurance, also known as Medigap, policies work is important for you to get the best coverage at the lowest price possible.

Instructions

• 1

  Understand traditional Medicare. Medigap policies work as a wraparound to traditional Medicare. Know what Part A, Part B and Part D mean. Read up on how a Medicare beneficiary pays for things, such as coinsurance or co-payments. Medigap information online (see the Resources section) often covers Part B co-insurance plans. If you're not sure what that is or what that would amount to, you won't understand how a Medigap will affect you.

• 2

  Familiarize yourself with what each of the plans cover. There are 10 Medigap plans labeled A, B, C, D, F, G, K, L, M and N, and regardless of what company sells them, each letter sells the same benefits. Plan "A" offers the least benefits at the lowest cost. "B" sells a few more benefits at a higher cost, and so on. Don't try to remember exactly what each plan sells; instead, just remember that the later the letter is in the alphabet, the more benefits it offers and the more it will cost. Call the Medicare Rights Center hotline at 800-333-4114, and ask them to send you a list of Medigap benefits for your review.

• 3

  Read the official Centers for Medicare & Medicaid Services publication "Choosing a Medigap Policy: A Guide to Health Insurance for People with Medicare" (see the Resources section). Centers for Medicare & Medicaid Services is the organization that administers Medicare. This publication will have the most accurate information you can find on the Web.

• 4

  Look up any terms or words you don't understand when you are reviewing benefits. If you are reviewing the benefits for plan C and you don't know what the word "deductible" means, look it up using Medicare Interactive's glossary. You'll find that a deductible is the amount you pay out of pocket before the insurance kicks in. Looking up these words and phrases will help you understand how the Medigap will cover your expenses.

• 5

  Call your local State Health Insurance Assistance Program or Department of Insurance to get the most detailed information about Medigap laws in your area. Medigap law varies from state to state; to be sure you have the right to purchase a Medigap, you should consult someone from either your "SHIP" or your Department of Insurance.