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Medicare Coverage Gap vs. Gap Coverage


Many people believe they’ll receive coverage for all their health care expenses once they’re on Medicare. The reality is there are several costs that Medicare alone doesn’t cover. Thus, beneficiaries must pay these out-of-pocket. The difference between what Medicare covers and truly full coverage constitutes a coverage gap.

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Luckily, a Medigap policy can help you bridge this gap, offering more security by serving as secondary insurance. Ultimately, obtaining gap coverage with a Medicare Supplement plan is a great way to save money and secure your future.

What is the Medicare Coverage Gap?

You’re probably at least somewhat familiar with the coverage gap, or donut hole, in the context of Part D prescription drug plans. This is not the same as the gaps in coverage that Medigap plans fill.

The donut hole refers to a phase in prescription drug coverage when the beneficiary must pay a certain percentage for drugs. This phase ends when the total amount spent on drugs in the year reaches a specific threshold, and the following stage, catastrophic coverage, begins.

What is Medicare Gap Coverage?

When we talk about Medicare gap coverage, we aren’t referring to prescription drug coverage. Gap coverage in this context pertains to Part A (hospital coverage) and Part B (outpatient coverage). Again, these parts of Original Medicare do not cover some vital parts of health care. To achieve this, you’ll need supplemental insurance and ancillary policies, such as a dental/vision/hearing plan.

Many Americans believe they won’t need to worry about certain expenses once they turn 65. Yet, this couldn’t be further from the truth. While Medicare alone covers most of your basic expenses, a small percentage is left for the beneficiary to pay.

A Medigap plan will cover what Medicare leaves for the patient in hospital and outpatient settings. Specifically, it works with your Medicare to ensure one hundred percent of your standard health care costs are handled. Plus, these plans include additional coverage that can save you a great deal of money in the future. In the content below, we will explain three ways gap coverage can help you save money and secure your future.

Medicare Supplement Plans as Gap Coverage

The best way to fill in the gaps Medicare leaves open is to obtain a Medicare Supplement policy. As the name Medigap would suggest, these plans fill in the holes in coverage. There are several different plan options for Medigap, offering varying amounts of coverage for a range of monthly premium prices. As you might expect, the plans that cover more benefits are higher in cost. 

Extended Coverage for Skilled Nursing Facilities

All Medigap plans except for those offering only the most basic benefits (Plan A and Plan B) provide gap coverage for care at skilled nursing facilities. Medicare alone only offers up to 20 days of full coverage for this care, after which you’re responsible for coinsurance payments each day until coverage runs out on the hundredth day.

While you may not currently foresee needing care at a skilled nursing facility, you’ll be grateful to have a safety net if you eventually find yourself in such a situation. The coinsurance cost alone is over $175 each day and rises each year. Cost-sharing Plans K and L cover 50% and 75% of this coinsurance respectively. The rest of the plans providing this benefit cover the entire amount.

Protection from Emergency Medical Bills Abroad

For seniors who enjoy traveling outside the United States, a Medigap plan is, without a doubt, the best supplemental insurance option. Medicare Advantage plans, on the other hand, might not cover providers and facilities outside of your county.

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With a Medicare Supplement policy, you get foreign travel emergency coverage. The lifetime limit is $50,000. With this coverage, your plan will pay the greater portion of your medical bills outside of the U.S. for up to 60 days at a time.

The only plans that do not offer foreign travel emergency coverage are, again, Plans A and B. Without a Medigap plan featuring this benefit, you could be facing high charges if you incur a medical emergency while out of the country.

Extra Days for Inpatient Stays

You never know when you could need to stay at the hospital. One thing is certain, though: with a Medigap plan, you’ll have fewer financial worries than you would with Medicare alone. All Medigap plans cover Part A coinsurance, much like how they handle the costs for skilled nursing facilities.

On standard Medicare, each day in the hospital after the first 60 days costs hundreds of dollars in coinsurance. After 90 consecutive days, you’ll need to start using your lifetime reserve days, of which Medicare provides 60. All Medigap plans, however, cover up to 365 extra days of inpatient hospital costs beyond Medicare’s 60 lifetime reserve days.

How to Obtain Gap Coverage for Your Original Medicare

The major benefits to Medigap that we elaborate on above are not the only ways these plans can save you money on your health care. Some beneficiaries are hesitant to invest in an additional policy, as they are already paying their Part B premiums each month. However, when you consider potential, unexpected medical expenses, years of Medigap premiums are dwarfed in comparison.

If you're interested in learning more about your Medigap options, please give us a call. Our agents can help you understand how these plans work to fill in the gaps that standard Medicare leaves. To see plan options in your area now, fill out our online rate form.

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Jagger Esch

Jagger Esch is the Medicare expert for MedicareFAQ and the founder, president, and CEO of Elite Insurance Partners and MedicareFAQ.com. Since the inception of his first company in 2012, he has been dedicated to helping those eligible for Medicare by providing them with resources to educate themselves on all their Medicare options. He is featured in many publications as well as writes regularly for other expert columns regarding Medicare.

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