Medigap Insurance

What is a Medicare Supplement and how does it work?

Medicare Supplement (Medigap) plans are offered through private insurance companies and are designed to fill the gaps in Original Medicare (Parts A & B) coverage. When you purchase a Medicare Supplement plan, Original Medicare remains your primary insurer, allowing you to see any doctor or facility that accepts Medicare with no need for referrals. The Medicare Supplement plan becomes your secondary insurer, that covers non-Medicare covered expenses such as co-payments, deductibles, and provide health care if you travel outside the United States.

Medigap policies don't cover long-term care, dental care, vision care, hearing aids, eyeglasses, and private-duty nursing and prescription drug coverage is not included.

• When you receive covered healthcare services, Medicare will pay its share of the Medicare-approved amount for covered health care costs.
• Then, your Medigap policy pays its share.

For a Medigap plan, you pay a monthly premium to the insurance company in addition to your Medicare Part B premium. The cost of your Medigap policy depends on the type of plan you buy, the insurance company, your location, and your age. A standardized Medigap policy is guaranteed renewable -- even if you have health problems -- if you pay your premiums on time.

However, you may have to wait up to six months for coverage if you have a pre-existing health condition. The insurer through which you buy your Medigap policy can refuse to cover out-of-pocket costs for pre-existing conditions during that period. After six months, the Medigap policy must cover the pre-existing condition. The exception to this rule is if you buy a Medigap policy during your open enrollment period and have had continuous "creditable coverage," or a health insurance policy for the six months before buying a policy. The Medigap insurance company cannot withhold coverage for a pre-existing condition in that case.

Insurance companies set their own prices and rules about eligibility, so it's important to shop around.

Medigap Plans benefits are standardized in most states in the US, so the benefits are the same for a plan no matter what insurance company you choose. Less expensive plans have fewer benefits and higher out-of-pocket costs. More expensive plans include extra benefits, like some Medicare deductibles, additional hospital benefits, at-home recovery, and more. You have to decide what sort of plan makes the most sense for you.

How do Medigap policies work?

You must have MedicarePart A and Part B.

A Medigap policy is different from a Medicare Advantage Plan.  Those plans are ways to get Medicare benefits, while a Medigap policy only supplements your Original Medicare benefits.

You pay the private insurance company a monthly premium for your Medigap policy. You pay this monthly premium in addition to the monthly Part B premium that you pay to Medicare.

A Medigap policy only covers one person. If you and your spouse both want Medigap coverage, you'll each have to buy separate policies.

You can buy a Medigap policy from any insurance company that's licensed in your state to sell one.

Any standardized Medigap policy is guaranteed renewable even if you have health problems. This means the insurance company can't cancel your Medigap policy as long as you pay the premium.

It's illegal for anyone to sell you a Medigap policy if you have a Medicare Advantage Plan, unless you're switching back to Original Medicare.

Fortunately, Medicare supplement plans are available from a variety of insurers to help pay for the following medical expenses:

• Coinsurance and hospital costs for up to one year after Medicare benefits are used up
• Blood transfusions for up to three pints of blood
• Hospice care coinsurance or copayment
• Skilled nursing facility care coinsurance
• Medicare Part A (hospital insurance) deductible
• Medicare Part B (medical insurance) deductible
• Part B excess charge (the difference between the amount a doctor or health care provider can legally charge and the Medicare-approved amount)
• Medical costs incurred while traveling outside of the U.S.
• Out-of-pocket limit

There are going to be some changes in the plans starting on January 1, 2020 and the following information depicts the benefits for the plans starting on that date.

The chart below shows basic information about the different benefits Medigap policies cover.

Yes = the plan covers 100% of this benefit
No = the policy doesn't cover that benefit
% = the plan covers that percentage of this benefit
N/A = not applicable