Medigap can be used only by people enrolled in traditional Medicare. It is not a government-run program, but private insurance you can purchase to cover some or most of your out-of-pocket expenses in traditional Medicare. These may include Part B costs, like the 20 percent you'd otherwise pay for physician visits and other outpatient services, the Part A hospital deductible (currently $1,100 for each hospital benefit period), most of the cost of medical emergencies abroad and certain other outlays, depending on which kind of policy you choose. Each of the 10 types of medigap policies is standardized by law — meaning the benefits of each are the same, regardless of which insurer sells it. But insurers still charge widely different premiums, so it pays to shop around.

Medicare Advantage comprises a variety of private health plans — most often HMOs and PPOs — that Medicare offers as a coverage alternative to the traditional program. Every plan must cover all the same benefits that traditional Medicare covers. But the plans can charge different copayments (often lower than the traditional program but not always) and offer extra benefits. Most charge a monthly premium in addition to the Part B premium, but some don't. Most include prescription drug coverage at no additional cost. Some cover routine hearing and vision services, usually as a separate package for an additional premium. Another difference from the traditional program is that most plans require you to go to doctors and other providers within their service network or pay higher copays for going out of network.

Note: If you enroll in a Medicare Advantage health plan you cannot, by law, also purchase a medigap policy, even though you still have out-of-pocket expenses under that health plan. If you stay in traditional Medicare, you would need to join a separate Part D plan to get prescription drug coverage and pay an extra premium for it. And medigap does not cover out-of-pocket drug expenses.

Comparing and choosing plans

When deciding whether to buy a medigap policy to cover expenses in traditional Medicare or enroll in a Medicare Advantage plan, it's important to look at the details of each plan available to you in order to find the one that best suits your needs and pocketbook. Medicare has online programs to help you make these comparisons.

Medigap policies: Visit the Medigap Policy finder at the Medicare website.
Enter your ZIP code and follow the instructions. You will see a chart showing all the policies (each labeled with a different letter of the alphabet) available in your area. Clicking on "View Details" for each policy brings up full information for that policy. To see which insurers sell the policy, click on "View All Companies" on the right hand side of the details page. This provides contact information for the companies. You will need to contact them for a premium quote.

• If you have Medicare because of disability: Medigap policies are not always available to beneficiaries under age 65. To see the situation in your own area, click on the link marked "Show only policies available to people under age 65" at the top of the chart that lists all policies. If any appear, click on those for details and then click on "View All Companies." Insurers that sell policies to people under age 65 are marked "Yes" in the first column.
  

Medicare Advantage plans: Visit the Medicare Plan finder at the Medicare website. Enter your ZIP code and follow the instructions. Eventually you will see a list of about 10 health plans. To see the full list of plans available in your area, click on "View 20" or "View 50" at the top of the list. This page provides broad information such as premiums and whether prescription drugs are covered. To see details of each plan's costs and benefits, click on the name of the plan.

• If you have Medicare because of disability: Medicare Advantage plans are all available to beneficiaries under age 65, with one exception. You cannot enroll in any of these plans if you already have end-stage renal disease, defined as needing regular dialysis or a kidney transplant.
  

Patricia Barry is a senior editor with the AARP Bulletin.

Also of interest:

• Help make our health care system more affordable
• Medicare Part D & You

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