Navigating the world of Medicare can be overwhelming, especially when it comes to choosing the right supplemental coverage. That’s why it is important to understand what Medigap standardized benefits are and how they work.
Medigap is a type of private insurance that helps beneficiaries cover the “gaps” in Original Medicare (Parts A and B). Medigap plans cover things like; deductibles, coinsurance, and copays. What many people don’t realize is that Medigap policies are standardized, meaning the benefits for each plan type are the same, no matter which insurer you choose.
What “Standardized” Means
Starting in 1992, federal law requires all Medigap policies to adhere to standardized benefit structures, designated by letters: Plans A through N. The only real difference in plans is the premium each carrier charges for the plan. Although insurance companies charge different premiums, the benefits for each plan letter must be identical no matter who the provider is. In other words, every Plan N has to provide the exact same coverage for medical expenses no matter what company offers it.
Standardization makes it easy for beneficiaries to compare plans without worrying about differences in coverage. They can simply compare cost and company ratings to find the best options.
Examples of Medigap Plan options
- Plan A: This is the most basic plan option. It provides coverage for Medicare Part A coinsurance and hospital costs, Part B coinsurance, and the first three pints of blood.
- Plan G: The most comprehensive plan available to those who turned 65 after 1-1-2020. It covers all Medicare approved expsnes with the exception of the Part B deductible.
- Plan N: Offers lower premiums than Plan G and covers a portion of the copays for doctor visits and hospital visits. The enrollee will still have a small copay for Medical services. This plan does not cover the Part B deductible or excess charges.
Some States Have Different Medigsp Standards
Although most states follow the federal standardization model, Massachusetts, Minnesota, and Wisconsin have their own versions of standardized Medigap plans. These states use their own benefit structures however, they still follow the principle of offering consistent benefits across insurers within their states.
Please Note
- Plan C and Plan F are no longer available to beneficiaries who became eligible for Medicare on or after January 1, 2020. These plans provided coverage for the Medicare Part B deductible, which new legislation phased out to cut back on the overuse of services.
- Beneficiaries must have both Medicare Part A and Part B to enroll in a Medigap plan. There is a premium for Medigap plans in addition ot the Part B premium.
- Medigap works with Original Medicare, beneficiaires cannot use a Medigpa plan with a Medicare Advantage (Part C) plan.
Why Standardization is Important
Standardization simplifies decision-making for Medicare beneficiaries. It eleiminates the need to decipher insurnace benefits accross multiple insurance companies; instead, the focus is on price, company reputation, and rate increase history.
Watch a quick YouTube video on Medicare Supplement Underwriting
This helps foster competition between companies based on cost and service quality instead of confusing plan designs.
Choosing a Medigap plan doesn’t have to be a guessing game. With standardized benefits, benficiaries can make apples-to-apples comparisons between insurers and choose the coverage that meets both healthcare and financial needs.