The Difference Between Original Medicare With and Without Medigap:

For many Medicare beneficiaries, understanding the difference between Original Medicare and Medigap (Medicare Supplement Insurance) can be confusing. Both provide essential healthcare coverage, but they address your out-of-pocket costs in very different ways. By understanding how these two types of coverage work together—or apart—you can make a more informed decision about your healthcare needs and financial situation.

In this blog, we’ll break down the key differences between having Original Medicare on its own and combining it with Medigap.

What is Original Medicare?

Original Medicare consists of two parts: Part A (hospital insurance) and Part B (medical insurance). These plans cover most of your basic healthcare needs, but they still leave you responsible for certain out-of-pocket costs, such as:

• Deductibles: The amount you must pay for healthcare services before Medicare starts to pay.
• Coinsurance: The percentage of costs you share with Medicare after the deductible is met.
• Copayments: Fixed amounts you pay for certain services like doctor visits or hospital stays.

While Original Medicare covers a broad range of medical services, it doesn’t pay for everything, and there’s no annual out-of-pocket limit. That’s where Medigap comes in.

What is Medigap?

Medigap is supplemental insurance that helps cover the "gaps" left by Original Medicare. These gaps include out-of-pocket costs like deductibles, copayments, and coinsurance. Medigap plans are sold by private insurance companies and come in 10 standardized options, each offering a different level of coverage.

Medigap policies can help:

• Reduce out-of-pocket costs for hospital stays, doctor visits, and medical services.
• Provide predictability in healthcare spending, as you’ll know exactly what your Medigap plan covers.
• Offer nationwide coverage, meaning you can see any doctor or specialist that accepts Medicare.

The Difference in Costs: With and Without Medigap

Without Medigap:

When you rely solely on Original Medicare, you’re responsible for certain out-of-pocket costs that can add up quickly, especially if you have frequent doctor visits or hospital stays. Here are a few examples of potential costs:

• Medicare Part A: While most people don’t pay a premium for Part A, you will face a hospital deductible ($1,600 per benefit period in 2024), along with coinsurance for extended hospital stays.

• Medicare Part B: After meeting the annual deductible ($226 in 2024), Medicare typically covers 80% of your medical costs, leaving you to pay the remaining 20%.

This 20% coinsurance may not seem like much, but if you require major medical treatments like surgeries or hospital stays, your out-of-pocket costs can skyrocket since Original Medicare doesn’t have a limit on how much you may need to spend.

With Medigap:

When you add Medigap coverage to Original Medicare, many of these out-of-pocket costs are either significantly reduced or eliminated entirely. Here’s how Medigap can help:

• Covers hospital costs: Medigap can cover the Part A deductible and coinsurance for hospital stays.
• Pays for Part B expenses: Medigap may cover the 20% coinsurance you would otherwise pay out of pocket for medical services like doctor visits and surgeries.
• Reduces unpredictability: Medigap provides peace of mind by reducing surprise medical bills.

For example, if you need surgery, Medigap can cover the Part B coinsurance, which could be hundreds or even thousands of dollars depending on the procedure. Without Medigap, you’re responsible for paying that amount on your own.

The Difference in Coverage: Flexibility and Networks

Without Medigap:

Original Medicare gives you flexibility to see any doctor or specialist that accepts Medicare, and you don’t need referrals to see specialists. This means you have access to a wide network of healthcare providers nationwide, which is great if you travel often.

However, Original Medicare doesn’t cover everything. Key services such as dental, vision, and hearing care are not covered, which means you’ll either need to pay out-of-pocket for these services or buy additional insurance.

With Medigap:

Medigap offers the same nationwide flexibility as Original Medicare—you can see any healthcare provider that accepts Medicare. Additionally, some Medigap plans offer extra benefits that cover the deductibles and coinsurance that Original Medicare leaves behind.

However, Medigap does not typically cover services like dental, vision, or hearing either. If these services are important to you, you may need to purchase separate dental and vision plans or consider a Medicare Advantage plan (Part C), which often includes these extras.

The Difference in Financial Predictability

Without Medigap:

With just Original Medicare, it can be difficult to predict how much you’ll spend on healthcare each year. For example, a sudden illness or surgery could lead to high out-of-pocket costs with no annual limit on your spending.

With Medigap:

Medigap helps provide financial predictability. By covering many of Medicare’s out-of-pocket costs, Medigap ensures that you have lower, more predictable healthcare expenses. This can be especially beneficial for those on a fixed income or with ongoing health issues.

Which Option is Right for You?

Whether you choose Original Medicare alone or with a Medigap policy depends on your healthcare needs and financial situation. Here are a few things to consider:

• If you’re generally healthy and don’t expect to need frequent medical services, you might be able to manage with just Original Medicare.
• If you’re concerned about high out-of-pocket costs or have chronic health conditions, a Medigap plan can offer peace of mind by limiting your financial exposure.

Review your current health status, income, and future healthcare needs to decide which option is best for you.

Conclusion:

Understanding the difference between Original Medicare with and without Medigap is key to making an informed decision about your healthcare coverage. While Original Medicare provides essential coverage, it leaves gaps that can be costly without additional help. By adding a Medigap policy, you can significantly reduce your out-of-pocket expenses, giving you greater financial predictability and peace of mind.

If you’re unsure which option is right for you, consider speaking with a Medicare Trusted Advisor who can help guide you through the process.