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How Medicare Differs from Medigap

Medicare and Medigap are two terms that are often confused due to their outward similarities. However, their definitions are quite different as you will soon learn in this article. We hope to dispel any confusion and offer other helpful resources as well.

First, a brief explanation of Medicare

Original Medicare is offered to qualified seniors and disabled individuals as a form of government-sponsored health insurance to help cover some of their medical expenses.

It comes in two parts: Part A helps to cover hospital expenses while Part B helps to cover approved medical expenses such as doctors and various other outpatient services. For a more comprehensive overview of Medicare, please read our article titled, “Understanding Medicare”.

Medicare is basically health insurance for seniors and retirees who typically are not eligible for private health insurance coverage after the age of 65. However, it is far from 100% coverage and as we age and are in need of more healthcare, costs can soar.

This is where Medigaps come into play…

Defining Medigap

Unlike government-sponsored Medicare health insurance, Medigap is optional, private health insurance for seniors and certain disabled individuals and is meant to “pick up where Medicare leaves off”.

The word “gap” sums it up nicely: MediGAP insurance policies help to fill in some of the “gaps” in healthcare costs that Medicare does not cover. These gaps can be medical costs such as copayments, coinsurance and deductibles.

There are several different Medigap policies available through a variety of different insurance companies. As such, polices must be “standardized” and meet government regulations. The participating private insurance companies must also be approved and regulated by Medicare.

There is also another often-used term used for Medigap policies which is a little less confusing: Medicare Supplement Insurance (or simply “supplement”). Just think of it as “supplementing” your Original Medicare coverage.

For more information on this subject, please read our article titled, “Medicare Supplement Insurance Policies (Medigap)”.

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