Demystifying Medicare Supplement (Medigap) Terms

May 30, 2024

In the ever-evolving landscape of healthcare, understanding the terminology associated with Medicare Supplement (Medigap) insurance can feel like deciphering a complex code. From "Part A" to "Coinsurance," jargon can leave many scratching their heads in confusion. In this blog post, we're embarking on a journey to unravel the mysteries behind Medigap terms, empowering you to make informed decisions about your healthcare coverage. Let's get started by navigating through this Medigap terminology maze together.

Medicare Part A (hospital insurance) - This is a part of Medicare and is required before you can purchase a Medigap policy. Part A includes hospital inpatient and recovery care in nursing facilities, hospice, and home healthcare services.

Medicare Part B (medical insurance) - This is also a part of Medicare and is a requirement before you can purchase a Medigap policy. Part B covers 80% of outpatient medical care and doctors' visits along with preventative services.  

Coinsurance - This is a percentage of the medical service you pay after your deductible has been met. Coinsurance is a way of saying that you and your insurance carrier each pay a share of a bill that adds up to 100 percent.

Deductibles - As the policyholder, you’re responsible for covering costs up to a certain amount before the insurance company starts to pay for covered healthcare services.

Copayments (copays) - These are fixed prices set by the insurance company that the policyholder must pay for medical services. The difference between coinsurance and copays is that copays are a flat fee instead of a percentage. 

Skilled Nursing Facility - This is a health-care institution that provides 24-hour nursing, medical, and rehabilitative care to patients who need it. Patients may stay at a SNF for short or long-term periods usually after leaving a hospital for an illness, surgery, or injury.

Skilled Nursing Facility Coinsurance - This coverage helps pay for care at a SNF after a hospital stay. To qualify, the SNF stay must begin within 30 days of leaving the hospital, be for the same reason as the hospital stay, and be supervised by a doctor. In each Benefit Period, your costs vary based on how long you are in the SNF.

Benefit Period - This is how Medicare measures your hospital and SNF usage. A Benefit Period starts when you're admitted as an inpatient to a hospital or SNF, and it ends either when you have not received inpatient care for 60 days in a row, or when you have received up to 100 days of skilled care in a SNF. After one Benefit Period ends, another may start, and you would have to pay the Part A deductible again.

Foreign Travel Emergency - If you're on vacation and have an emergency, Medicare can help pay for some of the care, but only during the first 60 days of the trip, and up to 80% of the bill. Medicare will cover up to $50,000 for emergencies abroad if you've paid an annual $250 deductible.

Part B Excess Charges - Imagine Medicare is like a coupon book for doctor visits and medicine. The coupon says how much Medicare will pay, like a discount. Normally, doctors agree to this discount and only charge what the coupon says. But some doctors are like stores that don't always take coupons. They might charge extra on top of what Medicare pays. The good news is you can avoid this by asking your doctor if they accept Medicare Assignment. If they say yes, it's like they're taking the coupon, and you won't get stuck with Part B excess charges.

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