A Medicare SELECT policy is a type of Medigap policy. Like all Medigap policies, it covers out-of-pocket expenses leftover by Original Medicare. However, it is unique in that it only covers those expenses if the patient received care from certain hospitals. Learn more about SELECT policies below.
How Medigap Policies Work
In order to understand SELECT policies, you first need to understand Medigap policies. Original Medicare covers many services. Between Parts A and B, most inpatient and outpatient healthcare services are covered. However, Original Medicare does not cover all of these services in full. For example, Medicare only covers 80% of many outpatient services. This means that the patient is responsible for 20%. Considering how high healthcare costs are, this can quickly add up.
Medigap policies are policies sold by private insurers authorized by the federal government to cover this gap in coverage. These policies are based on ten templates, but the exact price of each plan is different depending on the area and insurance policy.
How SELECT Policies are Different
Normally, anyone with Medicare can go to any hospital or provider that accepts Medicare. Most providers participate in Medicare, so Medicare patients enjoy a wide selection of hospitals to choose from. However, SELECT policies are different. SELECT Policies are Medigap policies that only allow patients to receive care at a certain hospital or group of hospitals and still have their out-of-pocket costs covered. For example, someone could go to a provider at a different healthcare network outside of their SELECT policy designated system. However, the SELECT policy would not cover that 20% gap in coverage that the patient has to pay out-of-pocket because it was not at the select hospital. It is important to note that these types of policies are only offered in select areas.
Pros and Cons of SELECT Policies
The main advantage of the SELECT policies is the costs. Because the insurer is able to negotiate with only one hospital, they are able to keep their costs lower which then keeps the patient’s cost lower. Reducing your monthly premium can make a big difference for many people struggling to keep up with all of the different Medicare monthly premiums. The main drawback of the SELECT policy is the lack of flexibility. If you would like to receive care at a different hospital, you are not able to be seen there and have your coverage guaranteed.