Reg Jones Expert's View

If you are a federal retiree who is covered by a Federal Employees Health Benefits plan and covered by Medicare do you need a Medigap plan? In order to answer that question, you first need to know what a Medigap plan is.

In simple words, a Medigap plan is one that 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.

Not surprisingly, the cost of these plans varies by state and locality. However, if you are willing to use specific hospitals and, in some cases, doctors, the plan cost may be much lower. 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, and you will pay any deductibles or coinsurances.

With that as background, we’re back to where we started. It’s time to answer the question, “Do you need to buy a Medigap plan?” Not if you are in a Medicare managed care plan or a fee-for-service plan, such as Blue Cross-Blue Shield or GEHA. Says who? The Department of Health and Human Services, that’s who. Their reason is that a Medigap plan won’t provide you with any coverage that you don’t already have.

FEHB plans are typically more extensive than most Medigap policies, so purchasing Medigap if you have FEHB could well amount to wasting money on duplicate coverage.