Medicare is a federally funded health insurance program designed for Americans who are either permanently disabled or are 65 years of age and older. It pays many of the health care costs but not all of them. Coverage under the program is divided into two parts – A and B. Part A, traditionally referred to as “Hospital Insurance,” covers in-patient hospitalization, some skilled nursing care, hospice care and very limited home health care – all subject to deductibles. Most seniors receive Part A coverage automatically when they turn 65. Part B is “Medical Insurance.” It covers physicians services, out-patient medical and surgical services and supplies, some diagnostic tests and durable medical equipment such as wheelchairs, hospital beds and walkers. There is a monthly premium for this coverage ($66.60) and an annual deductible ($110) must be satisfied.


Because the basic protection afforded by Medicare leaves gaps in coverage that require out-of-pocket expenditures, having only Medicare coverage for health insurance can pose a financial burden for seniors who are on a fixed income. There are other kinds of health insurance that “fill the gap.” They help to pay the costs that Medicare does not.


Medigap policies are sold by private insurance companies to provide supplemental health insurance. Medigap coverage affords various health benefits at different premiums. There are ten available policies, identified by alphabet letters A through J, that are federally regulated and standardized across most of the United States (except Massachusetts, Minnesota and Wisconsin). Premiums are age-rated, meaning that they may be more costly as you age, and community rated, taking into consideration claims experience. Provided that an application of Medigap coverage is submitted within six months of eligibility for Medicare, coverage cannot be denied, even for a pre-existing condition.


For the most part, Medigap policies cover the Medicare deductibles, coinsurance and co-payments. Some Medigap policies also cover benefits that are not covered by Medicare, like routine check-ups and even prescriptions. These polices help lower out-of-pocket expense.