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What is Medicare Supplement Insurance (Medigap)?

A Medicare Supplement Insurance (Medigap) policy helps pay some of the health care costs that Original Medicare doesn’t cover, like:

  • Copayments
  • Coinsurance
  • Deductibles

Medigap policies are sold by private companies.

Some Medigap policies also cover services that Original Medicare doesn’t cover, like medical care when you travel outside the U.S. If you have Original Medicare and you buy a Medigap policy, here’s what happens:

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

8 things to know about Medigap policies

  1. You must have Medicare Part A and Part B.
  2. 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.
  3. 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.
  4. A Medigap policy only covers one person. If you and your spouse both want Medigap coverage, you’ll each have to buy separate policies.
  5. You can buy a Medigap policy from any insurance company that’s licensed in your state to sell one.
  6. 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.
  7. Some Medigap policies sold in the past cover prescription drugs. But, Medigap policies sold after January 1, 2006 aren’t allowed to include prescription drug coverage. If you want prescription drug coverage, you can join a Medicare Prescription Drug Plan (Part D).
  8. 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.

Medigap policies don’t cover everything

Medigap policies generally don’t cover Long-term care, vision or dental care, hearing aids, eyeglasses, or private-duty nursing.

Insurance plans that aren’t Medigap

Some types of insurance aren’t Medigap plans, they include:

  • Medicare Advantage Plans (like an HMO, PPO, or Private Fee-for-Service Plan)
  • Medicare Prescription Drug Plans
  • Medicaid
  • Employer or union plans, including the Federal Employees Health Benefits Program (FEHBP)
  • TRICARE
  • Veterans’ benefits
  • Long-term care insurance policies
  • Indian Health Service, Tribal, and Urban Indian Health plans

Dropping your entire Medigap policy (not just the drug coverage)

You may want a completely different Medigap policy (not just your old Medigap policy without the prescription drug coverage). Or, you might decide to switch to a Medicare Advantage Plan that offers prescription drug coverage.

If you decide to drop your entire Medigap policy, you need to be careful about the timing. When you join a new Medicare drug plan, you pay a late enrollment penalty if one of these applies:

  • You drop your entire Medigap policy and the drug coverage wasn’t  Creditable prescription drug coverage
  • You go 63 days or more in a row before your new Medicare drug coverage begins
Q: What are Medicare Supplement (Medigap) plans?
A: Medicare Supplement plans are an optional way for people with Original Medicare to cover some or all out-of-pocket costs, such as deductibles and copays or coinsurance.
 
What do Medigap plans cover? In most states each Medigap plan has a Plan letter (A-N), which is different than the Parts of Medicare (A-D). These plans are standardized, meaning the federal government sets the benefits each Plan letter (A-N) must cover. The states of Massachusetts, Minnesota, and Wisconsin use different standardized plans. Plans with the same letter cover the same benefits. For example, a Plan F from one insurer covers the same benefits as a Plan F from a different insurer, despite any differences in cost. Based on the plan you buy, you will have either lower or no out-of-pocket costs when you receive Medicare-covered services at a participating provider or hospital. Medigap plans do not cover prescription drugs. If you choose one, you might also want to think about buying a Part D plan. If you buy a Medigap plan, the benefits under that plan will never change and the plan may not drop you as long as you pay your premiums. This is called Guaranteed Renewable.
Individual Medicare Supplement policies are designed to help pay the deductibles and 20% not paid for under the original Medicare program. With a  Medicare supplement policy you are able to see any physician who will bill Medicare first for services.
Individual Medicare supplement policies include a basic core of benefits. In addition to the basic benefits, Medicare supplement insurers offer specified optional benefits. Each of the options that an insurance company offers must be priced and sold separately from the basic policy.
Q: Who can buy a Medicare Supplement (Medigap) plan?
A: You can buy a Medicare Supplement if you have both Medicare Parts A and B. You also must be able to pass or be exempt from medical underwriting. You can buy a Medigap plan without going through underwriting during your first six months with Medicare Part B. This is sometimes called the Medigap Open Enrollment period or Guaranteed Issue. There is no yearly Medigap Open Enrollment period to change plans. If you miss your Medigap Open Enrollment, Medigap companies do not have to sell to you. They can require that you pass the medical underwritng criteria and if not, deny you based on your health.
 
Beneficiaries with disabilities. Disabled beneficiaries under the age of 65 have equal access to all Medicare supplement policies sold in many states.
 
Upon enrolling in Medicare Part B, a disabled beneficiary has a six-month enrollment period to buy supplemental coverage. That period begins the day Part B coverage becomes effective. Many states allow plans to set higher premiums for those under age 65 even though you may be eligible to Medicaare due to disability. Disabled Medicare beneficiaries typically cannot be turned down for a Medicare supplemental plan being sold during the initial six-month open-enrollment period but some states do not require that insurance companies offer their Medicare supplement plans to those under age 65. Coverage at the start of your Medicare is guarantee issue, but the same pre-existing condition limitation as applies to age 65 beneficiaries may apply. A second open-enrollment period will apply when the disabled Medicare beneficiary turns 65.
 
See also: When can I buy a Medicare Supplement plan?
Q: When can I buy a Medicare Supplement (Medigap) plan?

A: Unlike other private insurance that works with Medicare, there is no yearly open enrollment to join a Medigap plan. You can apply to the insurance company directly to buy a Medigap plan at any time, but the insurer could also require you to pass a health screening before it will sell to you. There are certain times when you may be exempt from taking the health screening, including if: 

  • You are in your first six months with Medicare Part B. 
  • You have Original Medicare and are enrolled under an employer group health plan (as an employee, retiree or dependent) and you stop receiving coverage under the group plan. 
  • You are in a Medicare Advantage Plan, Medicare Select plan, or PACE plan and your plan is leaving Medicare, stops giving care in your a rea, you move out of the plans service area, or the plan violates an important rule outlined in your policy. 
  • Your Medicare supplement insurance company goes bankrupt and you lose coverage, or your Medicare supplement coverage otherwise ends through no fault of your own. 
  • You left a Medigap plan for Medicare Advantage, and want to return to your Medigap plan within 12 months, or you joined a Medicare Advantage plan when you first joined Medicare, and want to leave that for a Medigap plan within 12 months. In these cases, you may still be limited to Medigap plans available to people in your age group. 
  • You lose eligibility for Medicaid. 
Q: What do Medicare Supplement (Medigap) policies cost?
A: The cost of a Medicare Supplement varies depending on several factors including your age, where you live, in some cases your gender, and the type of plan you select.  If purchased outside of your guaranteed issue or open enrollment timeframes you may also pay more if you use tobacco or have certain health conditions.  Call us today at (920) 858-8752 for a free quote. 
If you get a Medigap plan, in addition to the premium for that plan, you still pay your monthly premiums for Medicare Part B (and Part A, if any). 
Also, some Medigap plans have a waiting period to cover pre-existing conditions. This waiting period may last up to six months, even if you are in your Medigap Open Enrollment. You might be able to have the plan waive this waiting period if you are replacing other creditable coverage within 63 days. 
Q: Can I have both a Medicare Supplement (Medigap) plan and a Medicare Advantage plan?
A: Medigap plans do not fill gaps in Medicare Advantage plans. People with Medicare looking for other private insurance may choose between Medigap and Medicare Advantage plans, but cannot have both. 
Q: What questions should I consider when choosing between a Medicare Supplement and Medicare Advantage program?
A: 
  • Does my doctor take this plan?
  • If I qualify for the Low Income Subsidy or Extra Help from Social Security, how will this change my options and costs?
  • If I qualify for a Medicare Savings Program through Medicaid, how will this change my options and costs?
  • Will I be able to go to the provider or hospital of my choice?
  • Does my out-of-pocket cost grow if I use the plan more?
  • Is there an out-of-pocket limit per year? (This is a maximum amount I would have to pay out of pocket before the plan covers all care.)
  • Will I have coverage if I travel outside my immediate area?
  • Are there any protections (such as guaranteed renewability, etc.) for me in this plan? What are they?
  • Are there any extra benefits provided to me in this plan? What are they?
  • What is not covered?
  • Will I need to consider buying a Part D plan?
Q: Why would I stay in Original Medicare with a Medigap instead of joining Medicare Advantage?
A: This is a very personal decision. Some reasons we have heard from clients include: 
  • Peace of mind paying a flat rate for a premium to have lower or no out-of-pocket costs and balances when you get care. 
  • Ability to travel in the U.S. without worrying if you are in a plan’s service area. 
  • Freedom to choose providers with no referrals required. 
Q: Are you leaving a Medigap plan?
A: If you change from a Medigap to a Medicare Advantage plan or other replacement plan, its up to you to cancel your Medigap/Medicare Supplement coverage. 
If you paid a yearly premium for your Medigap plan, the law does not require the plan to refund you any portion of that premium. Do not cancel your old plan until you verify you are active in your new coverage. 
Q: What is a Medicare Select Policy?
A: A Medicare Select insurance policy is designed to supplement the benefits available under the Medicare program.  These plasn are offered by insurance companies and health maintenance organizations (HMOs). Medicare Select policies are similar to standard Medicare Supplement insurance but the covered services must be obtained through plan providers selected by the insurance company or HMO. This type of policy available is less areas than a standard Medicare Supplement plan but the premium is typically quite attractive. Each insurance company that offers a Medicare Select policy contracts with its own network of plan providers to provide services. Medicare Select insurers must pay supplemental benefits for emergency health care furnished by providers outside the plan provider network. Medicare Select policies typically deny payment or pay less than the full benefit if you go outside the network for non-emergency services. Medicare still pays its share of approved charges if the services you receive outside the network are services covered by Medicare.

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© 2024 UpgradeMyMedicare. All rights reserved. UpgradeMyMedicare is a trademark of Allboc Insurance Solutions, LLC

Allboc Insurance Solutions, LLC is a licensed and certified representative of a Medicare Advantage (HMO, PPO, and PFFS) organization and a stand-alone prescription drug plan with a Medicare contract. Enrollment in any plan depends on contract renewal. By completing the contact form above or calling the number listed above, you will be directed to a licensed sales agent who can answer your questions and provide information about Medicare Advantage, Part D or Medicare supplement insurance plans. Availability of carriers and products are dependent on your resident zip code.

The purpose of this communication is the solicitation of insurance. Contact may be made by an insurance agent/producer or insurance company. Medicare Supplement insurance is available to those age 65 and older enrolled in Medicare Parts A and B and in some states to those under age 65 eligible for Medicare due to disability or End Stage Renal disease. Medicare Supplement insurance plans are not connected with or endorsed by the U.S. government or the federal Medicare program.

We do not offer every plan available in your area. Any information we provide is limited to those plans we do offer in your area. Please contact Medicare.gov or 1-800-MEDICARE to get information on all of your options.

*Allboc Insurance Solutions and UpgradeMyMedicare are not affiliated with any governmental program or agency. Plans can only be changed during certain times of the year.

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