Medigap insurance, also known as Medicare Supplement Insurance, was created to help fill the gaps in coverage that are not covered by Original Medicare. Original Medicare, which includes Part A (hospital insurance) and Part B (medical insurance), provides coverage for many healthcare services, but it does not cover all costs. Medigap insurance was designed to provide additional coverage for expenses such as deductibles, copayments, and coinsurance that beneficiaries would otherwise have to pay out of pocket.
The main reasons for the creation of Medigap insurance are as follows:
1. Cost-sharing: Original Medicare requires beneficiaries to pay certain out-of-pocket costs, such as deductibles and coinsurance. Medigap insurance helps cover these costs, reducing the financial burden on beneficiaries.
2. Coverage gaps: Original Medicare does not cover certain services, such as prescription drugs, routine vision, and dental care. Medigap insurance can provide coverage for these services, depending on the plan chosen.
3. Choice and flexibility: Medigap insurance allows beneficiaries to choose from a variety of plans offered by private insurance companies. This gives them the flexibility to select a plan that best meets their individual healthcare needs.
4. Stability and predictability: Medigap insurance provides stability and predictability in healthcare costs by helping to cover the gaps in coverage left by Original Medicare. This can be particularly beneficial for individuals on fixed incomes who want to budget for their healthcare expenses.
It's important to note that Medigap insurance is only available to individuals who are enrolled in Original Medicare. Additionally, Medigap plans are standardized and regulated by the federal government, which ensures that beneficiaries receive consistent coverage regardless of the insurance company they choose.