Expert's View

Are you a federal retiree enrolled in an FEHB plan and also covered by Medicare? If so, then do you need to buy a Medigap plan?

To answer that question, you need to find out what a Medigap plan is. Simply stated, it’s a plan designed to fills in benefit gaps in Medicare coverage. While every state has a standardized Medigap plan, each plan has a different set of benefits. However, each standardized Medigap plan must cover certain basic benefits–for example, Medicare coinsurance and copayments. While Medigap plans do fill a number of gaps in Medicare, they don’t cover such things as long-term care, vision and dental care, hearing aids, private-duty nursing or unlimited prescription drugs.

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It’s no surprise to learn that the cost of these plans varies by state and locality. However, the plan cost may be much lower if you are willing to use specific hospitals and, in some cases, doctors. Plans that offer this more restricted access to medical care are called Medicare Select plans. While a Medicare Select plan will not pay for care that you receive from non-plan providers, Medicare will pay its share of any regularly covered expenses, leaving you with the responsibility of paying any deductibles or coinsurances.

With that as background, it’s time to answer the question, “Do you need to buy a Medigap plan?” If you are in a Medicare managed care plan or a fee-for-service plan, such as Blue Cross-Blue Shield or GEHA, the answer is “absolutely not.” That’s the conclusion reached by the Department of Health and Human Services. Here’s their reason: a Medigap plan won’t provide you with any coverage that you don’t already have.

Further, FEHB plans typically are superior to Medigap policies, so retirees with Medicare and FEHBP coverage likely have little need for additional insurance—which could amount to paying more just to get duplicative coverage.