Rules of Medigap plans

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Author: William Richards

The Medicare Supplement Plans or the Medigap policies are supplementary health insurance policies that are sold by the private insurance companies. These policies are not independent policies and are closely related with the Original Medicare. The purpose of the Medicare Supplement Plans is to fill up the gap between the policy coverage of the Original Medicare plans and the actual medical bill payable. That is a reason why these policies are also known as the Medigap plans.

The Medigap offerings or the Medicare supplement plans have been standardized by the Centers of Medicare and Medicaid Services (CMS) in 1992. Though Medigap policies were also available prior to 1992 but the seniors possessing the plans prior to 1992 are still under non-standard plans. But these plans are no longer eligible for the new plans. It is to be mentioned that the Medigap or the Medicare supplement plans are sold by the private insurance companies and there are no government sponsorship behind them. And for that reason the insurance policies may vary from state to state. According to the law, the companies can offer only 12 Medicare supplement insurance plans. And these plans are named from A through L and each plan provides different sets of benefits. In 2006 it has been clearly stated that the Medigap Plans H, I, and J, cannot be sold to people with prescription to drug benefits, although there is a lax of this rule for people who already have those plans and they can keep them. And it is also to be noted that each Medigap policies must offer the same basic benefits, irrespective of whatever company may be selling them. The only thing that can differ from company to company is the amount of premium payable by the beneficiary. The point is that if you purchase a Medigap policy from any company under any letter cover the benefits must be same as provided by other companies under the same letter cover, for example, if you want to purchase a policy under the letter cover C or D the policy coverage and the benefits would be the same irrespective of whatever company you may choose.

In most of the cases the Medicare Supplement Insurance companies can only sell standardized Medigap policies. It is also that the companies must mention the specific benefits that they offer so that you can easily compare them. It may be that each and every company may not offer every Medigap plans A through L, but they are bound to provide clear information about the policies they are dealing with. But the fact is that each company must provide Medigap plan A if they wish to offer any other Medicare Supplement Plans. However to sell the rest of the policies should be decided by the company themselves, although law might affect which ones they offer. But also with that as the Medigap plans are mostly administered by the private companies therefore the amount of the premium payable is totally under their consideration.

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