The Centers for Medicare and Medicaid Services (CMS) outlines that “a Medigap policy is health insurance sold by private insurance companies to fill the ‘gaps’ in Original Medicare Plan coverage.” Medigap policies help in paying off some of the health care costs that the Original Medicare Plan doesn’t cover. If you are enrolled in the Original Medicare Plan and have a Medigap policy, then Medicare and your Medigap policy will each pay its share of covered health care costs.
The health care costs shared by Medigap include coinsurance, copayments, and deductibles. It is important to note that according to the latest guidelines of CMS, “as of January 1, 2020, Medigap plans sold to new people with Medicare aren’t allowed to cover the Part B deductible.”
Moreover, Medigap does not cover the following policies:
- Employer or union plans, including the Federal Employees Health Benefits Program (FEHBP)
- Indian Health Service, Tribal, and Urban Indian Health plans
- Long-term care insurance policies
- Medicaid
- Medicare Advantage Plans (like an HMO, PPO, or Private Fee-for-Service Plan)
- Medicare Prescription Drug Plans
- TRICARE
- Veterans’ benefits
Medigap Policies Key Pointers
Following are the major things to remember about Medigap policies as given by CMS:
- You must have Medicare Part A and Part B.
- A Medigap policy is different from a Medicare Advantage Plan. While Medicare Advantage plans are ways to get Medicare benefits, a Medigap policy only supplements your Original Medicare benefits.
- You pay the private insurance company a monthly premium for your Medigap policy. You pay this monthly premium in addition to the monthly Part B premium paid to Medicare.
- A Medigap policy only covers one person. If you and your spouse both want Medigap coverage, you’ll each have to buy separate policies.
- You can buy a Medigap policy from any insurance company that’s licensed in your state to sell one.
- Any standardized Medigap policy is guaranteed renewable even if you have health problems. This means the insurance company can’t cancel your Medigap policy as long as you pay the premium.
- Some Medigap policies sold in the past cover prescription drugs. But, Medigap policies sold after January 1, 2020, aren’t allowed to include prescription drug coverage. If you want prescription drug coverage, you can join a Medicare Prescription Drug Plan (Part D).
- It’s illegal for anyone to sell you a Medigap policy if you have a Medicare Advantage Plan unless you’re planning to switch back to Original Medicare.
Role of Medigap in Medical Billing
Medigap policy is designed to cover the gaps that aren’t reimbursed by Medicare and Medicaid programs. However, understanding Medigap may be a little tricky due to so many technicalities and guidelines involved. Medical billing for Medigap requires thorough knowledge of the policy in order to do an error-free billing; therefore hospitals are outsourcing medical billing services to medical billing and collections companies to ensure maximum reimbursement under Medigap policy. Proper billing of Medigap claims is the only way to receive payment for services that may not get paid otherwise.
