What Is Medicare Supplement Insurance (Medigap)?

Medigap insurance, also known as Medicare Supplement Insurance, is a type of private health insurance designed to supplement Medicare coverage for individuals who are enrolled in Original Medicare (Part A and Part B). Original Medicare helps cover hospital and medical expenses, but it does not cover all healthcare costs. Medigap policies are intended to fill the “gaps” in coverage by paying for certain out-of-pocket costs, such as deductibles, copayments, and coinsurance.

Here are a few highlights of Medicare Supplement Insurance:

• Variety of Plans: Medigap policies are standardized into ten plans in most states, each labeled with a letter (A, B, C, D, F, G, K, L, M, and N). Each plan offers a different level of coverage, so you can choose the one that best fits your needs.
• Coverage Beyond Original Medicare: Medigap can cover additional expenses that Original Medicare doesn’t cover, like Part A deductibles and Part B coinsurance.
• Choice of Doctors: With a Medigap policy, you can see any doctor who accepts Medicare.
• No Referrals Needed for Specialist Visits: Unlike some Medicare plans, with Medigap, you generally don’t need a referral to see a specialist.
• Predictable Out-of-Pocket Costs: Medigap policies can help you manage your out-of-pocket healthcare costs, giving you predictability and peace of mind.

How Do Medicare Supplement Plans Work?

Medicare Supplement plans work by filling in the gaps left by Original Medicare. This means that if you have a Medigap policy, it will cover some or all of the costs that Original Medicare doesn’t cover.

For example, if you have an emergency hospital stay with Original Medicare, you will be responsible for paying your deductible and coinsurance. However, if you also have a Medigap policy, it can help cover these costs so you don’t have to pay as much out-of-pocket.

It’s important to note that Medigap policies only work with Original Medicare and cannot be used with other types of insurance, such as Medicare Advantage plans or employer-sponsored coverage.

Additionally, it’s essential to understand that while all Medigap policies are standardized, the cost and availability of each plan can vary based on your location and insurance company. That’s why comparing plans from different companies is recommended to find the best coverage at the most affordable price for you.

Benefits of having a Medigap policy.

A Medigap policy comes with several key benefits:

• Financial Security: Medigap policies can significantly reduce your out-of-pocket healthcare expenses, providing you with financial security and peace of mind.
• Flexible Choices: With a variety of standardized plans to choose from, you can select the one that fits your budget and healthcare needs the best.
• Nationwide Coverage: Medigap policies provide nationwide coverage, allowing you to see any doctor or visit any hospital that accepts Medicare, irrespective of state lines.
• Foreign Travel Coverage: Some Medigap plans even cover the costs of healthcare services when you’re traveling abroad, which Original Medicare doesn’t usually cover.
• Guaranteed Renewability: As long as you pay your premiums, your Medigap policy is guaranteed renewable, meaning the insurance company can’t cancel your policy even if you have health problems.
• Freedom to Choose Specialists: With a Medigap policy, you can visit a specialist without needing any referrals.

These benefits make Medigap a worthwhile consideration for anyone enrolled in Original Medicare.

Who is eligible for Medigap?

To be eligible for a Medigap policy, there are certain criteria you need to meet. Here’s a simplified rundown:

• Age Requirement: You must be 65 or older. Some states allow people under 65 to get Medigap.
• Medicare Enrollment: You need to be enrolled in Medicare Part A and Part B. Medigap supplements these plans, not a standalone policy.
• Timing: It’s best to enroll in Medigap during your Medigap open enrollment period (the six months starting the month you’re 65 or older and enrolled in Part B). You have guaranteed issue rights during this time, meaning companies can’t deny you coverage or charge you more due to health issues.

Bottom Line

Medicare Supplement Insurance (Medigap) is a valuable addition to Original Medicare, providing coverage for expenses not covered by the latter. With its standardized plans and various benefits, Medigap offers financial security and flexibility, making it an appealing option for those seeking to reduce out-of-pocket healthcare costs. However, eligibility requirements and enrollment periods should be carefully considered when deciding on a Medigap policy. So research and compare plans to find the best one for you.

Sources: CMS.gov – Medicare.gov

FAQ

Can I enroll in a Medigap policy at any time?

For most people, the best time to enroll in a Medigap policy is during your Medigap open enrollment period, which lasts for six months starting from the first month you are eligible for Medicare Part B.

Are there any medical underwriting requirements for Medigap policies?

Companies cannot deny coverage or charge more due to pre-existing health conditions if you enroll during your Medigap open enrollment period. Some companies may require medical underwriting before offering coverage outside of this period.