A client recently asked me why his Medigap Policy Plan F did not cover physical therapy received in a nursing home after a slip and fall. Medigap policies are intended to cover the co-pays and deductibles associated with traditional Medicare A and B. The Medigap Plan F is one of the more comprehensive Medigap Plans you can purchase. It not only covers the traditional co-pays and deductibles associated with hospital stays and doctor’s visits, but also the co-pay associated with Medicare related nursing home stays that last more than 20 days – currently $164.50 per day.

Turns out he had a high deductible Plan F policy. This type of Medigap policy requires the insured to spend an out of pocket maximum expense of $2,200 (in 2017) before the policy pays anything. So he had to use his own funds to pay for his wife’s stay at the nursing home. He was unaware that the reduced premium he was paying for the policy came with the obligation to pay more out of pocket when he needed to use the benefits.

Many of my clients have no idea what their Medigap policy will cover. The policies are typically purchased within 6 months of acquiring Medicare Part B when they can be acquired without regard to an applicant’s health. Medigap Plans are standardized in most states (Visit www.medicare.gov to compare the alphabet soup of plans). The initial purchase decision for a Medigap Plan may be based on the premium. Lower premium plans such as Plans K and L cover only a percentage of the co-pays and deductibles associated with Medicare Part A and B and have an out of pocket maximum that must be met before coverage starts. That can be a shock to the insured when significant costs are incurred years after the policy is purchased.

Carefully choose your Medigap plan at the time you acquire Medicare Part B.  Anticipate the coverage you may need years after acquiring the insurance. The plans are guaranteed renewable. However, if you want to drop your plan after the 6 month grace period, you will likely need to be underwritten for a new Medigap plan. Given your age and health conditions, you may not be insurable.


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