Medigap

Many beneficiaries choose to get their Medicare benefits through Original Medicare, the fee-for-service coverage under which the federal government pays your health care providers directly for services and supplies included in your Part A and/or Part B insurance. Original Medicare does cover many medical expenses, but millions of beneficiaries have enrolled in supplementary insurance to help pay for the sometimes overwhelming out-of-pocket costs.

America’s Health Insurance Plans (AHIP) has reported, “Medigap coverage is a vital lifeline to more than 10 million Medicare beneficiaries.”[1] Medigap policies, also referred to as Medicare Supplement or “Med Supp” plans, are sold by private insurance companies. Every Medigap policy must follow federal and state laws designed to protect you, and the policy must be clearly identified as “Medicare Supplement Insurance.” In most states, standardized policies are identified by letters A through N. All of the policies must offer the same basic benefits, but many offer additional coverage as well. For instance, all Medigap policies must cover Part A and Part B coinsurance costs, blood, and additional hospital benefits not covered by Original Medicare, but some Medigap policies can also include:

  • Part A coinsurance and hospital costs up to 365 days after Medicare benefits have been used up
  • Part B coinsurance and copayments
  • Three pints of blood
  • Part A Hospice care coinsurance or copayment
  • Part A deductible
  • Part B deductible
  • Skilled nursing facility care coinsurance
  • Medical care during foreign travel (up to plan limits)

Costs can differ between the same plan in the same state, so comparing plans before enrolling is crucial.

Frequently Asked Questions

Q: I have a Medicare Advantage Plan. Can I enroll in a Medigap Plan to add more insurance coverage?

A: No, if you have a Medicare Advantage (MA) Plan, you cannot purchase a Medigap policy. If you have a Medicare Advantage Plan, you can apply for a Medigap policy, but make sure you can leave the Medicare Advantage Plan before your Medigap policy begins.

Q: I have Original Medicare Part A, but I have not enrolled in Part B. Can I purchase a Medicare Supplement Plan?

A: You must have Medicare Part A and Part B in order to purchase a Medigap policy. Your 6-month Medigap Open Enrollment Period beings when you are 65 years of age and enrolled in Part B.

Q: If there a Medigap policy that provides prescription drug coverage?

A: As of January 1, 2006, Medigap policies no longer offer prescription drug coverage. If you have Original Medicare and a Medigap policy and need help paying for medications, you can consider enrolling in a stand-alone Part D Prescription Drug Plan (PDP). You can find more information about Medicare Part D here.

Q: Will a Medigap policy supplement all of my medical expenses?

A: No. While a Medigap policy can certainly help pay many expenses not covered under Original Medicare, it does not cover everything. For instance, Medigap does not include prescription drug coverage, vision or dental care, hearing exams, eyeglasses, long-term care or private duty nursing.

Q: How does Medigap pay my Medicare Expenses?

A: Generally, once you purchase your Medigap policy, the Medigap insurance company will get your Part B claim information directly from Medicare, and then they will pay the doctor directly. Some Medigap insurance companies also provide this service for Part A claims.

Q: I am under 65, but receive Medicare benefits due to disability. Am I eligible for Medicare Supplement insurance?

A: Insurance companies are not required by law to sell Medigap policies to Medicare beneficiaries under the age of 65, but there are some states that offer them. Research the plans sold in your state, If there are not any Medicare Supplement Plans available for beneficiaries under 65, you may have to wait until you turn 65.

Q: What can I expect when purchasing a Medigap policy after my Open Enrollment Period has ended?

A: If you apply for Medigap coverage after your Open Enrollment Period, there’s no guarantee that an insurance company will sell you a Medicare Supplement Plan. You will be subject to the medical underwriting requirements, and the insurance company can charge you more because of pre-existing conditions.

Q: What is Medicare SELECT?

A: Medicare SELECT is a type of Medigap policy sold in some states that may require you to see certain providers, but may cost less than other Medicare Supplement plans. If you enroll in a Medicare SELECT plan, you may have to use hospitals and doctors within its network in order to be eligible for full insurance benefits, except in the case of a medical emergency. I you choose to see physicians, hospitals, or providers outside of the network, you may be responsible for all of the expenses not covered by Medicare.

Q: I have a Medigap Plan that is no longer sold. Do I need to switch to another plan?

A: Over the years, some Medigap Plans have been discontinued, but you may not have to change yoru coverage. For instance, Medigap Plans E, H, I, and J are no longer for sale, but you can keep these plans if you already have one. If you purchased a policy before January 1, 2006, you may have prescription drug coverage through your Medigap plan, as well. Any standardized Medigap policy is guaranteed renewable even if you develop health issues.

Q: Can my Medigap policy be cancelled?

A: The insurance company cannot cancel your Medigap policy as long as you pay the monthly premium and were truthful on your application, unless the insurance company becomes bankrupt. If your company becomes insolvent, you will have a right to switch to another Medigap policy.

[1] New Report: Medigap Enrollment Continues to Increase; AHIP Coverage; May 20, 2013; www.ahipcoverage.com/2013/05/20/new-report-medigap-enrollment-continues-to-increase