Medigap is Different than Medicare, Which is Different than Medicaid...
Things can get real confusing quick for many
folks on both sides of the coin. That's why it is essential as an insurance
professional you can explain the differences between Medigap, Medicare, and
Medicaid to your clients. Scratching your head, wondering what those
differences are? Follow along.
Medicare and Medicaid, Key Differences
Medicare and Medicaid are both
government-sponsored programs. And because of the similar names, it can be
confusing how each works and what they cover.
However, here are five key differences between the two:
● Eligibility for Medicare is not based on income level.
● Medicare is the leading medical coverage provider for most people 65 and older. As well, those disabilities.
● Medicaid is often a last resort program for those without access to other means.
● Medicaid is created for people with limited income.
● Eligibility for Medicaid is determined on a state-by-state basis.
It's worth noting that once Medicaid recipients reach age 65, their Medicaid eligibility will continue. And they become eligible for Medicare. Medicaid coverage may change based on the beneficiary income during this time. Individuals with higher income may find that Medicaid pays their Medicare Part B premiums. Lower-income individuals with lower income may continue to receive full benefits.
Of course, another coverage many people struggle with in addition to the government-funded programs is Medigap plans or Medicare Supplement plans. While Medigap plans often accompany Medicare plans, Medigap plans are sold by private insurance companies.
Understanding Medigap
Different insurance companies may sell
Medigap, but the plans have been standardized. This means that each plan has to
offer the same coverage, all of them a-n. The cost of each plan can vary among the various
insurance companies.
Medigap plans come with a monthly premium, and insurance companies may set their monthly premiums differently. There are three types of pricing:
- Attained-age-rated: The premium is based on applicants current age and goes up as they get older
- Community-rated/no-age-rated: Applicant age has no effect on premium
- Issue-age-rated/entry-age-rated: The age the applicant is when they buy the plan determines premium
There can be a big difference in premium for the same coverage among insurance companies, applicants may want to shop around before enrolling in a plan. Medigap plans are meant to supplement Original Medicare Part A and Part B. It is against the law for an insurance company to sell a Medicare Supplement insurance plan if the applicant has another type of insurance. Examples would include Medicare Advantage or Medicaid. If the applicant has a Medicare Advantage plan, they may only apply for a Medicare Supplement insurance plan if they are planning to return to Original Medicare.
The Bottom Line
As you can see Medicare, Medicaid and Medigap
are all very different plans with different coverages. Before working with
clients on these products, it's best that you have a great understanding of who
they are meant for and how they work.
If you are an insurance professional struggling with all the different terms and regulations when it comes to health care, maybe you should try going back to insurance school. Our online classes may be able to help you.