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Medigap Insurance Although Medicare provides help for basic medical coverage, it can- not cover everything. Because of these gaps in coverage, people have found that they benefit from supplemental Medicare coverage, which has come to be known as Medigap insurance. Medigap is issued by private insurance companies, not the government as Medicare is. There are 10 standard Medigap policies, all of which extend different types of coverage and may cover the Medicare deductibles, as well as other types of costs that Parts A and B don’t cover. Until recently, there were many different, and confusing, types of Medigap insur- ance. People found that they were either purchasing coverage that wasn’t helping them, or purchasing too much insurance. To help rec- tify this, the Medigap insurance plans were standardized, which has helped many people to understand and select the right Medigap pol- icy for their situation.

The first Medigap plan is called Plan A. This is the basic insur- ance plan. The others are named Plans B through J. Although private companies offer these plans, they are not allowed to change the names of the policies (they may add to the names, but the letter des- ignation must remain the same), nor are they allowed to alter the types of coverage offered. Insurers are also not bound to offer each of the 10 plans in each state, but if they offer Plans B through J, they must offer Plan A. (See Table 13.5 for a comparison of the 10 plans.)

Plan A offers the core benefits, which all subsequent plans also offer. These benefits consist of:

  • coverage for the daily Part A coinsurance amount for days 61–90 of a hospital stay for each Medicare benefit period

  • coverage for the daily Part A coinsurance amount for the 60 lifetime reserve days for a hospital stay

  • coverage for 100 percent of the Part A eligible hospital expenses after all Medicare benefits are used (limited to 365 days of additional coverage over the lifetime of the insured)

  • coverage under Parts A and B for the (reasonable) cost of the first three pints of blood per calendar year—this also covers the equiva- lent quantity of packed red blood cells in the same time frame

  • coverage for the 20-percent coinsurance amount for Part B once the annual deductible is paid

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