Medicare Supplemental Insurance Benefits for Elder Care

Page Reviewed / Updated - Feb. 2014

Definition

Medicare Supplemental insurance is often referred to as Medigap.  Medigap policies are supplemental Medicare insurance policies sold by private companies to fill the “gaps” in Medicare plans. There are 10 standardized plans defined by federal law, referred to as Plans A, B, C, D, F, G, K, L, M and N.   Not all 10 plans are available in every state, nor does each insurance company choose to offer all plans. 

 

Discussion

 Even the most comprehensive of the plans does not cover long term care needs for the elderly.

Medigap plans are intended to fill the “gaps” in Medicare insurance. Since most long term care for seniors is not covered by Medicare, this is a considerable “gap”. However, even the most comprehensive of the Medigap plans does not cover long term care needs for the elderly. These policies do not pay for assisted living, Alzheimer's, custodial or adult day care. At best, they supplement nursing home care on a temporary basis and help with hospice coverage.

When a senior is in recovery mode following an accident or procedure, some plans will help in limited capacity with skilled nursing care, but this is short term only. Medicare pays for 100% of skilled nursing care for 20 days and they pay 80% of the cost for 80 more days. Some Medigap plans will pay for the remaining 20% for the remaining 80 days, meaning a senior can receive 100 days of skilled nursing care with very little out of pocket cost.

 For military retirees and family members, there are two programs that offer very similar benefits to Medigap plans; these are CHAMPVA for Life and TRICARE for Life. Participation in either of these programs may make having a Medigap plan unnecessary.

 

Qualifying
  • All Medigap policies require a senior to have Medicare, so at a minimum, seniors must meet the Medicare Eligibility Requirements
  • Must be 65 years of age.
  • States regulate these plans therefore seniors must purchase a plan in the state where they reside.
  • Coverage restrictions may apply if a plan is purchased more than 6 months after enrollment in Medicare.

 

Benefits

Medicare supplemental plans benefits extend on the benefits of Medicare. There are 10 different plans; each offers a different level of benefit.  Plans do not provide seniors with cash payments; instead seniors make lower payments to their medical providers.

Benefits differ depending on which of the 10 different policies an individual purchases. For skilled nursing care, Medicare pays 100% for 20 days and 80% for 80 more days. Most Medicare supplemental policies will cover the remaining 20%, seniors can therefore receive up to 100 days of nursing home care with little out-of-pocket cost.

Some of the more robust plans also will pay an “at-home recovery benefit” of up to $40 per visit for 40 visits. This covers custodial care but only for an hourly visit and again only on a short term basis after an illness, injury, or surgery. 

To best understand and  compare benefits of the different plans, visit the Medicare.gov webpage.

 

Costs

Costs will differ for each of the plans. The older a senior is, the more they will pay for this type of insurance. One should expect a minimum of $100 / month for those aged 65 and $200 / month for those over 75.

Plans are sold by private companies but coverage is mandated by the state and federal laws, therefore providers are all offering very similar policies. As a result, shopping by price is a smart strategy.

 

How to Purchase

It is best to purchase a policy within 6 months of enrollment in Medicare as during this period insurers are required to accept applicants regardless of pre-existing conditions.

Medigap plans are sold directly by private companies. Click here to find Medicare Supplemental Insurance in your area.

 Each state has a State Health Insurance and Assistance Program called SHIPs which are staffed by volunteers that help seniors with their Medicare related questions.  Find SHIPs in your state.