Medicare Gap Insurance, or Medigap, is a private insurance policy designed to supplement Medicare coverage for senior citizens in the United States. The purpose of Medigap is to fill in the gaps in coverage left by traditional Medicare, such as deductibles, coinsurance, and copayments.
Medigap plans are popular because they reduce a lot of out-of-pocket expenses associated with medical care and can also provide coverage for services that are not covered by Medicare, such as nursing care and the cost of medical care outside of the U.S.
Benefits of Medicare Gap Insurance
Medicare Gap Insurance provides several benefits to seniors who are enrolled in Medicare. Some of the key benefits include:
- Lower out-of-pocket costs: Medigap policies cover out-of-pocket expenses not covered by Medicare, such as deductibles, coinsurance, and copayments. This can help seniors save money on healthcare costs and avoid financial hardship.
- More comprehensive coverage: Medigap policies can provide more comprehensive coverage than traditional Medicare, including coverage for medical care received while traveling outside of the United States. You must first pay out-of-pocket a $250 deductible before a Medigap policy pays out for foreign travel emergencies. The Medigap policy will then cover 80 percent of any foreign emergency medical expenses you incur, up to the $ 50,000 lifetime limit. Please note that there are a few other restrictions to this benefit.
- Guaranteed renewable coverage: Medigap policies are guaranteed renewable, which means if you pay your premiums on time, insurance companies cannot cancel your policy.
- No network restrictions: Unlike some Medicare Advantage plans, Medigap policies do not restrict the healthcare providers that seniors can see. This means seniors can see any doctor or specialist without worrying about network restrictions.
- Predictable costs: Medigap policies provide predictable costs, making it easier for seniors to budget for healthcare expenses.
Statistical Data on Medicare Gap Insurance
The Kaiser Family Foundation reported that in 2020 approximately 14.6 million Medicare beneficiaries had Medigap coverage, representing about 31% of all Medicare beneficiaries. The report also found that the average monthly premium for Medigap coverage was $187 in 2020.
The most popular Medigap plan is Plan F, which accounted for 57% of all Medigap enrollees in 2020. As the most comprehensive Medigap plan, Plan F covers all Medicare deductibles, coinsurance, and copayments.
Another important statistic to consider is the rate of Medigap policyholder satisfaction. In 2019, 91% of Medigap policyholders were satisfied with their coverage, according to America’s Health Insurance Plans (AHIP). This is higher than the satisfaction rate for Medicare Advantage plans, which was 84% in the same year.
In terms of cost, Medigap premiums can vary widely depending on factors such as age, gender, location, and health status. However, a study by the National Association of Insurance Commissioners found that the average annual premium for Medigap coverage in 2018 was $1,820. This represents a significant cost saving compared to the out-of-pocket expenses that seniors would incur without Medigap coverage.
Medicare Gap Insurance, or Medigap, is a valuable type of insurance coverage that can help senior citizens in the United States save money on healthcare expenses and obtain more comprehensive coverage than traditional Medicare provides. With a variety of plans available to choose from, seniors can select the plan that best meets their needs and budget. Overall, Medigap has high customer satisfaction and provides predictable costs, making it a popular choice among Medicare beneficiaries.