What medigap insurance coverage makes the most sense?
Choosing the best medigap insurance policy for you depends on a number of factors. You can help weigh them by making a list of available policies and comparing them side by side, including their initial costs, their coverage, how soon after purchase coverage begins, and the terms under which premiums can be raised. Here are some important things to consider:
- Long-term budget. Policies from plans with more coverage cost more. But even virtually identical policies from different companies can have very different premiums, so it's important to shop around. Remember, you may have this policy for many years, so what you can afford depends not just on your current finances but also on your likely income and assets down the road. That means you'll need to consider hikes in premiums over the years, not just the initial premium.
- Doctor charges. A big cost not covered by Medicare is the 15 percent a doctor can charge above the amount Medicare approves for a particular visit or service. Many doctors accept "assignment" of the Medicare-approved amount as the full amount they charge. But if you regularly see one or more doctors who don't accept this assigned amount, then a policy from Plan F or G -- which covers a doctor's excess charges -- may make good sense, even though the premiums are higher.
- Foreign travel. Medicare pays nothing for medical expenses outside the United States. If you regularly spend time abroad, a policy with coverage for emergency medical expenses outside the country -- Plans C, D, F, G, M or N -- can be a big plus.
- High total expenses. If you have a chronic or serious condition that entails high medical bills, a policy from Plan K or L may make good sense. These policies pay only 50 (Plan K) or 75 (Plan L) percent of covered expenses -- but there's a yearly cap on out-of-pocket medical expenses (for Plan K, it's $4,620 in 2010; for Plan L, $2,310 in 2010). Once your expenses reach that cap, the policy pays 100 percent for all further covered medical services. The security of this set figure can be a real comfort when care and costs begin to mount.