What Is Medigap? Medicare Supplement Plans Explained

What Is Medigap? Medicare Supplement Plans Explained

What amount of healthcare coverage is enough? We’ve all asked this question at different times of our lives. We want to know if we’ll be protected if we experience a sudden and unexpected medical crisis or face a diagnosis of a chronic illness requiring expensive services, supplies, or medications. This dilemma can be stressful for anyone to consider, but if you are approaching Medicare eligibility, you may be wondering if your Medicare insurance will provide adequate coverage for unforeseen medical expenses.

It’s impossible to see into the future, and even if you are healthy and active now, you may face changes in your health as you age. When choosing your health insurance, you are attempting to meet your current needs, but prepare for unexpected ones in the future, as well. If you are enrolling in Medicare for the first time because you are turning 65 or qualify due to certain disabilities, you will have some choices to make.

You can receive your benefits through Original Medicare, the program administered by the federal government, or through Medicare Advantage, offered by private insurance companies that provide the same Part A and Part B coverage, along with additional benefits.

What does Original Medicare coverage include? Original Medicare includes Part A (Hospital Insurance) and Part B (Medical Insurance) benefits.

Part A covers:

  • Hospital care
  • Skilled nursing facility care
  • Hospice care
  • Home health services 

Part B covers:

  • Preventive services (such as wellness visits and screenings)
  • Medically necessary services (such as ambulance services and durable medical equipment)

Part A and Part B will help pay for many medical expenses, but there are gaps in the coverage. If you are relatively healthy, you may not think you have to worry about out-of-pocket expenditures, but what if your health changes due to an injury or illness? Deductibles, premiums, copayments, or coinsurance can add up. Original Medicare does not provide an annual out-of-pocket maximum limit, so your expenses can certainly get overwhelming if you have a medical crisis, injury, or diagnosis of a chronic condition. During difficult health incidents, the last thing on your mind should be financial worry. Unfortunately, many Medicare recipients are living on limited incomes, and excessive medical bills can sabotage your carefully planned budget. There are ways to help supplement your Medicare insurance. Supplemental insurance plans, known as Medigap, may help alleviate your stress.

What is Medigap coverage?

Medigap, or Medicare Supplement, policies are sold by private insurance companies licensed in your state to sell to individuals with Original Medicare Part A and Part B. You can’t purchase a Medigap policy if you are enrolled in a Medicare Advantage plan.

You pay a premium for the Medigap policy in addition to your Part B premium. Medicare Supplement plans can protect you and your family from overwhelming healthcare costs, now and in the years ahead, but let’s review some important information about Medigap eligibility, choices, and costs:

Medigap Eligibility

When you turn 65 and are enrolled in Medicare Part B, you will enter a six-month Medigap open enrollment period. During this period of time, you can buy any Medigap, or Medicare Supplement, policy sold in your state without being subject to medical underwriting. Regardless of any pre-existing medical conditions, you will be able to buy the same policy at the same price as someone with perfect health.

However, if you choose not to buy a Medigap policy during your initial open enrollment period, and decide later that you need the additional coverage, you may not have the same options. After your Medigap open enrollment period ends, you will be subject to medical underwriting, can be denied enrollment in a Medigap plan, or you can be charged more due to any pre-existing medical conditions. Consider purchasing a Medigap policy during your initial enrollment period to reduce your long-term costs and ensure that an insurance carrier will sell you a Medigap policy, regardless of your current health.

Choices in Medicare Supplemental Insurance

Medigap plans are standardized and must follow federal and state laws designed to protect you. Medigap plans are identified by letters: A, B, C, D, F, G, K, L, M, and N. All policies offer the same benefits, but some offer additional ones, so you can choose which one is right for you. Insurance companies can choose if they want to sell Medigap policies, but if they do so, they must offer Plan A. (It’s important to note that Medigap policies in Massachusetts, Wisconsin, and Minnesota are standardized differently.)

As of January 1, 2020, Medigap policies can no longer include Part B deductible coverage, so Plan C and Plan F are no longer available for purchase to new Medicare enrollees. If you purchased Plan C or Plan F policies prior to January 1, 2020, you may keep your plan.

Why choose one plan over another? You may be wondering, “What does Medigap Plan A cover?” and “What different benefits are offered in other policies?” Some of the Medigap policies offer more or different coverage than others in certain areas. Part A, for instance, covers 100% of Part B coinsurance or copayment, while Plan K will only cover 50%. If you travel abroad frequently, you may want to consider Plans D, G, M or N because they cover 80% of foreign travel exchange (up to plan limits), or if you are concerned with the potential cost of skilled nursing care, you may want to look into Plans D, G, M, and N that cover 100% of skilled nursing facility care coinsurance.

Costs & Benefits

Every Medicare recipient has unique needs and circumstances, so researching and comparing plans is absolutely essential in finding the Medigap policy that will meet your specific coverage and budgetary needs. It is important that you compare each plan so you can make an informed decision, but you also need to compare the costs from the same letter plan from different insurance companies because the costs can vary, even in the same state.

Switching Medigap Policies

In most cases, under Federal law, you will not be able to switch Medicare Supplement policies unless you are still within your initial six-month open enrollment period or eligible due to a specific circumstance or guaranteed issue right. If you choose to switch, you will have a 30-day “free look” period. You will have to pay the premium for both policies for that month, but it gives you the chance to decide if you’d like to keep the new policy or continue with the one you have had.

Purchasing a Medigap Policy

If you are approaching Medicare eligibility, consider your healthcare coverage needs now and in the years ahead. Research and compare your options so that you can feel comfortable with your insurance coverage. Keep in mind, Medigap policies can help you cover the costs that Original Medicare does not, but they do not provide prescription drug coverage. If you are getting Original Medicare, and have decided to purchase a Medicare Supplement policy, you may also want to consider enrolling in a stand-alone Prescription Drug Plan (PDP).

If you are considering purchasing a Medigap policy, take the time to research and compare your options. HealthCompare’s user-friendly online comparison tools can help you narrow down the choices in your area so you can find the policy that is right for you. We offer free, accurate comparisons for Medicare Advantage (Part C), Medicare Supplement (Medigap), and Medicare Prescription Drug (Part D) plans.

Find a plan online or call  (888) 956-7735 - TTY 711 to speak with an experienced licensed sales agent today!