Medicare part A is the “Hospital” Insurance portion of Medicare. It covers inpatient care in hospitals, skilled nursing facilities and some home health care after a hospitalization and hospice care. Medicare Part A is available to individuals reaching age 65 who have been credited with 40 quarters or work history. Individuals entitled to Medicare Part A get it automatically at age 65 and do not have to pay a monthly premium. Some individuals who may not be automatically entitled to Medicare Part A, may be able to purchase it for a monthly premium. In 2010, the annual deductible for Medicare Part A is $1000.

Medicare part B covers doctor’s services, outpatient care and other medical services not covered by part A (physical & occupational therapy, some home health care and certain drugs administered by a physician). Individuals enrolled in Medicare part B have to pay a monthly premium that is dictated by household income.

If you do not enroll in Medicare Part B when you first become eligible or during a "special enrollment period" such as after you drop your group coverage after age 65 if you were still enrolled in a group health insurance plan, you may have to pay higher monthly premiums as long as you have Medicare Part B coverage.

If you are over age 65 and are covered under a group health insurance plan at work or are covered under your spouse's employer group health plan, you may wish to wait to enroll in Medicare Part B. Your Medigap enrollment period starts when you are 65 or older and have enrolled in Medicare Part B.

These are also called Medicare Advantage Plans. They are offered by health insurance companies approved by Medicare. These plans replace your Medicare part A and part B coverage in a variety of options including Medicare PPOs, Medicare HMOs, Medicare Private Fee-for-Service Plans (PFFS), Medicare Special Needs Plans (SNPs) and Medicare Medical Savings Account (MSA) plans. Many of these plans also include prescription drug coverage. Remember, if you join a Medicare Advantage Plan, then you will not need and should not buy a Medigap policy. Some Medicare Advantage plans include prescription drugs benefits (Part D) others do not. When you enroll in a Medicare Advantage plan that does not include prescription drug coverage you may also have a stand-alone prescription drug plan.

Medicare Part D covers prescription drugs benefits and is offered by many private insurance companies approved by Medicare. If you have an original Medicare plan and you already have a Medigap policy with prescription drug coverage, you can keep the Medigap policy with prescription drug coverage or join a Medicare prescription drug plan. If you have an original Medicare plan AND a Medigap policy without prescription drug coverage, you can keep the Medigap policy and join a Medicare prescription drug plan. As of January 1, 2006, Medigap policies being sold can not include prescription drug coverage, since this is now available as part of a Medicare part D plan.

Medicare Supplement Insurance is also known as Medigap Insurance. It is designed to complement your original Medicare insurance and covers items that either are not covered by Medicare or have limited benefits in traditional Medicare Part A and Medicare Part B.

Like anything else in life it is a matter of cost versus benefit. If your medical care consumption in the future will result in substantial out of pocket outlays on items not covered by Medicare, then perhaps a Medigap (Medicare Supplement Insurance) might make a lot of sense for you.

Once you have determined a Medigap policy makes sense for you, the best time to buy a Medigap policy is during your Medigap open enrollment period. This period lasts for 6 months and begins on the first day of the month in which you turn 65 or older and are enrolled in Medicare part B. In some states, including California, you can also buy a Medigap insurance policy prior to age 65 if you are eligible for Medicare because of a disability or End-Stage Renal Disease.

Depending on which Medicap plan you select and what state you live in, a Medicap insurance policy pays for your Medicare deductible, any required co-insurance and items either not typically covered by Medicare or with reduced benefits in the traditional Medicare plan. For example, Medicare part A does not cover the first 3 pints of blood, and has hospitalization coinsurance of $248 per day for days 61-90 and $496 per day for days 91-150. A Medigap policy can also pay for the hospitalization deductible of $992 for days 1-60 of a hospital stay in any given benefit period. In some cases, under Medicare part B, your doctor or medical supplier may not accept assignment of your Medicare claim and may charge more than the Medicare approved amount. In this scenario, a Medigap plan may pay for the “excess” charge, the difference between Medicare approved charges and your doctor’s bill.

Any one who has been approved for Medicare coverage. There are many "gaps" in Medicare coverage. Medigap insurance is designed to plug those "gaps".

No, a Medigap policy covers only one person. For a husband and a wife, each would have to qualify and buy his/her own Medigap policy.

By state and federal law, Medigap policies have been standardized to ensure they are well understood. Medigap policies are identified by letters – Plan A through L. In some states you may be able to buy another type of Medigap policy called the Medicare Select. Each Medigap policy offers the same basic benefits no matter which insurance company sells it, cost being the only difference in Medigap policies sold by different insurance companies.

Guaranteed issue rights means that an insurance company is required to offer or sell you a Medigap policy even if you have health problems (pre-existing conditions), which would typically prevent you from obtaining health insurance coverage. Under guaranteed issue rights, an insurance company which offers Medigap policies, must sell you a Medigap policy, cover all your pre-existing conditions, and can’t charge you more for a Medigap policy because of past or present health problems. You must enroll in a Medigap policy as soon as you become eligible for it, to take advantage of guaranteed issue rights.
 

All Medigap policies issued after 1992 are guaranteed renewable which means the insurance company can not drop you unless you fail to pay your premium, you lied on your original application or the insurance company goes out of business.

A Medicare Select policy is a type of Medigap policy that is sold in some states as one of the standardized Medigap plans A through L. This type of policy requires that you use only specific hospitals and doctors (except in emergencies). In return for using specific doctors and hospitals, this type of Medigap policy tends to have lower monthly premiums.

If you buy a high deductible Medigap policy (for example a high deductible Plan F compared to a standard deductible Plan F) you will have to pay a higher annual deductible before your policy starts paying any benefits. High deductible Medigap policies, tend to have lower monthly premium, since you the customer, pay a higher out of pocket amount, before benefits start kicking in.

Medigap policies do not cover long-term care (like a nursing home or extended care facility), vision or dental costs, hearing aids, eyeglasses and private-duty nursing.