The 10 Letters of Medigap Insurance
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It isn't news to older people who have Medicare insurance that there are gaps — some very big ones — in the plan. Medicare Part A, which is free for most, helps pay for care in a hospital or skilled nursing facility, as well as for some home health care and hospice care. Part A generally pays for about 80% of the charges for this care after the insured has paid the deductible. Those who do not qualify for free Medicare coverage under their own or their spouse's Social Security record can still get Medicare Part A, but they are required to pay the monthly premium of $423.00.
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Medicare Part B is optional, but those who opt in are charged a monthly premium, which is deducted from their Social Security benefits payment. The premium for Medicare Part B coverage this year is $96.40 per month for all except those who qualify for assistance based on low income. Medicare Part B covers some costs (about 80%) of doctors' services, outpatient hospital care, some ambulance services, physical and occupational therapy, medical equipment, and some home health care — but not all.
So, although a person has Medicare Part A and Part B and the government deducts a hefty $96.40 from their Social Security benefits, they still do not have enough health insurance coverage. Therefore, if they possibly can, they purchase a Medigap policy through a private insurance company.
The coverage offered by the Medigap insurance policies are the same from company to company for each option. There are 10 options. They begin with Plan A and go through Plan J. The coverage offered increases with each letter, as well as the cost. Plan A is the least expensive, and Plan J is the most expensive. Plan A only offers very basic coverage, while Plan J covers everything including prescription drugs.
