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  • Medicare Experience

What Is Medigap?

Learn about Medigap plan enrollment, costs, and coverage options.
Comprehensive Guide for Medigap

Medigap is the term used to describe health insurance plans that supplement your Original Medicare coverage.


While Original Medicare (Parts A and B) helps to reduce your healthcare costs, it doesn’t cover all of your healthcare expenses. Original Medicare still leaves gaps in your overall coverage.


That’s where a Medigap plan can assist.

A Medigap plan, or Medicare supplement, is an insurance policy that supplements your Original Medicare coverage.


In other words, people purchase Medigap plans to add additional coverage to their Original Medicare coverage. This additional coverage is used to cover those gaps in coverage left by Original Medicare.

While Original Medicare offers broad coverage to a wide variety of people, choosing a Medigap plan allows you to add more specific coverage that meets your needs.


You can purchase supplemental coverage to meet specific lifestyle considerations, financial goals, healthcare requirements, personal priorities, and more. Depending on the individual, a certain gap in coverage could pose a greater problem than another.


It might even be the case that a person is missing crucial coverage from what is provided by Original Medicare. So, that person would likely purchase a Medigap plan that ensures they have coverage for that crucial concern.

In this guide, we’ll provide a comprehensive look at Medigap and how it affects your healthcare coverage. Feel free to jump ahead if you see a specific topic that you’re interested in.


Medigap Topics Covered in This Guide:

  • Medigap Plan Basics

  • Benefits That Every Medigap Plan Must Cover

  • Understanding Your Medigap Plan’s Additional Benefits

  • When Am I Eligible for Medigap?

  • When Should I Purchase Medigap Coverage?

  • Using Your Medigap Card

  • Upcoming Changes to Medigap Plans for 2020

  • Costs of Medigap

  • Understanding Medigap and Medicare Advantage

  • Understanding Medigap and Medicare Part D

  • Medigap Coverage While Traveling Abroad

  • Medigap Scams and Illegal Practices


Medigap Plan Basics

To get started, we’ll introduce some of the basic points you should know about Medigap plans. These supplemental policies allow you to add coverage to your Original Medicare benefits (Parts A and B) to help with copayment, coinsurance, and deductible costs.

Here are some helpful facts to know about your Medigap plan:

  • If you would like to purchase a Medicare supplement, you must first enroll in Medicare Parts A and B (Original Medicare).

  • Your Medigap monthly premium is in addition to the monthly premium you must pay for Medicare Part B.

  • You can purchase a Medigap plan from any licensed insurance company in your state.

  • Medigap plans cover a single person. So, if you and your spouse both need Medigap coverage, each of you will have to buy your own policy.

  • If you already have a Medicare Advantage Plan, you cannot purchase a Medigap plan. This is only an available option if you are switching from your Medicare Advantage Plan to Original Medicare coverage.

  • Since 2006, Medigap plans are no longer allowed to cover prescription drugs. For prescription drug coverage, you’ll need to join a Medicare Part D Plan.

Benefits That Every Medigap Plan Must Cover

All Medigap plans are required by law to cover certain benefits and insurance companies are only allowed to sell you these standardized plans.


So, while Medigap plans differ slightly in the additional benefits they offer, every plan provides the same basic (or standard) benefits.


Medigap plan basic coverage list

All Medigap plans cover at least 50 percent of the following benefits:

  • Medicare Part A coinsurance costs up to an additional 365 days after exhausting Medicare benefits.

  • Medicare Part A hospice care coinsurance or copayments.

  • Medicare Part B coinsurance or copayments.

  • The first 3 pints of blood used in a medical procedure.


While these are the baseline requirements, your Medigap plan may go above and beyond. Some plans cover up to 100 percent of these basic benefits. Different plans offer different amounts in coverage, but the coverage listed here is the absolute minimum requirement.

*Medigap basic benefits differ in Massachusetts, Minnesota, and Wisconsin.


Understanding Your Medigap Plan’s Additional Benefits

Each lettered Medigap plan (A-N) comes with a different set of benefits from the other. However, all plans that are designated to a specific letter guarantee a standard set of benefits regardless of your location or insurance provider.


For example, any Medigap Plan N must offer the same standard benefits wherever you purchase the plan.

Pay close attention to the additional benefits offered by your Medigap plan choices. This is where you will be able to pick a plan that covers services and benefits specific to your needs.

For example, here is a list of additional benefits that Medigap Plan N offers. These benefits include the guaranteed basic benefits listed above that all Medigap plans must offer.

Medigap Plan N Covers:

  • Medicare Part A coinsurance costs up to an additional 365 days after exhausting Medicare benefits.

  • Medicare Part A hospice care coinsurance or copayments.

  • Medicare Part A deductible.

  • Medicare Part B coinsurance or copayments.

  • Skilled nursing facility coinsurance.

  • The first 3 pints of blood used in a medical procedure.

  • Foreign travel emergency up to plan limits.


Medigap plans are only available for purchase through private insurance providers. Different providers may charge different premium amounts for the same policy, so take some time to research your available options.


Your plan’s monthly premium will also vary depending on the amount of coverage that you choose.


When Am I Eligible for Medigap?

Once you are eligible for Medicare (age 65) and have enrolled in Parts A and B, you are eligible to purchase a Medigap plan.


Once your Part B coverage takes effect, your Medigap Open Enrollment Period begins and extends for 6 months.


Medigap Open Enrollment Period extends 6 months

So, if your Part B coverage begins on January 1st, your Medigap Open Enrollment Period starts on January 1st and ends on June 31st.


When Should I Purchase Medigap Coverage?

The best time to purchase a Medigap plan is during your Medigap Open Enrollment Period.

There is a key reason why this 6-month period is best. During this period, you have a guaranteed right to purchase any Medigap plan available in your state, regardless of your current status of health. You are guaranteed purchase of your desired plan.

So, even if you are currently experiencing health problems during your open enrollment, you have the right to purchase any Medigap policy sold by an insurance company for the same price as it is sold to those in good health.

If you don’t purchase Medigap coverage during your open enrollment period, you can still purchase supplemental coverage outside of your open enrollment period or if you have a guaranteed issue right.


Outside of Open Enrollment:


You are free to purchase a Medigap plan at any time. However, outside of your open enrollment, you lose your guaranteed right to purchase any available plan.


So, it is possible for insurance providers to deny you coverage if you don’t meet their underwriting requirements.


Insurance companies use a medical underwriting process when deciding to accept you and how much they will charge you for your Medigap policy. So, you may also be subject to higher premium costs.



Delaying Medicare Enrollment:


If you (or a spouse) have group health coverage through your employer, you may decide to postpone enrolling in Medicare Part B if your employer plan offers coverage similar to what you would find with Medigap.


Also, Part B comes with a monthly premium that many choose to avoid if the coverage is not needed at that time.

Once your employment ends, you can enroll in Part B without incurring a late penalty. Once you enroll in Part B, your Medigap Open Enrollment Period starts.


The same is true if you enroll in Part B while you are still employed. The period begins whenever you enroll in Part B, regardless.



Guaranteed Issue Right:


Generally, you have a guaranteed issue right to purchase a Medigap policy within 63 days of losing or ending certain coverage.


When you have a guaranteed issue right, providers must sell you a Medigap plan at the best available rate, regardless of your health.


Using Your Medigap Card:

When you purchase a Medigap plan, you will receive a Medigap card in the mail. This card is similar to your Medicare card but is not meant to take its place.


Instead, you will provide your Medigap card along with your Medicare card when visiting your healthcare provider. Doing so will help insure a smooth billing process.

The information on your Medigap card will include:

  • Your name

  • Your Medigap ID number

  • Medigap plan type

  • Insurance provider name

  • Insurance provider contact number


Upcoming Changes to Medigap Plans for 2020:

Starting in 2020, Medigap Plan C and Medigap Plan F will no longer be sold. If you have already purchased one of these Medigap plans, your plan will not be affected and you can continue it as long as you want.


However, newly eligible Medicare members will not be able to purchase these plans.


Medigap Plan C and Plan F not available to newly eligible in 2020

Plan C and Plan F are the only Medigap plans affected by this change because they are the only two that cover the Part B deductible. The U.S. Congress has decided that Medigap plans are no longer allowed to cover this deductible.


Costs of Medigap

Medigap plans come with monthly premiums that you will have to pay. Medicare does not cover these Medigap premium costs in any way.

For most Medigap policies, it is common for your insurance company to receive your Part A and Part B claim information from Medicare, allowing them to pay your doctor directly.

If your Medigap insurance company does not offer this service, be sure to ask if your doctors participate in Medicare. If they do, then your insurance company is required to pay your doctor directly upon your request.

Comparing Costs:

It is common practice to see insurance companies charging different premium amounts for the exact same policy coverage. So, it pays to do a thorough search of your available options when shopping for a Medigap plan.

Insurance companies get to decide the premium amounts for their Medigap policies. If you would like, you can ask the insurance company the method by which it prices its policies. There are 3 methods by which a policy can be priced:

  1. Community-rated.

  2. Issue-age-rated

  3. Attained-age-rated.



Community-Rated:

This pricing method is also known as “no age-rated.” These monthly premiums charge the same amount to everyone with the Medigap policy, regardless of their age.


When you shop plans that are priced this way, you can be certain that your premium will not be based on your age. The premium may go up over time due to other factors like inflation, but it will not go up for any reasons related to your age.


Issue-Age-Rated:

This pricing method is also known as “entry age-rated.” These monthly premiums are based on what your age is at the time you purchase the Medigap plan.


When you shop plans that are priced this way, you will find that premiums are higher for those who wait longer to purchase the plan. Purchasing at a younger age will result in lower premium rates.


The rate at which you purchase is locked in and won’t change as you age. The premium may go up for other factors like inflation, but it will not go up for any reasons related to your age.


Attained-Age-Rated:

This pricing method issues premiums based on your current age and increases in cost as you get older.


When you shop plans that are priced this way, you will find that premiums are among the least expensive at first, but eventually grow in price to be among the most expensive. Your premium may also go up for other factors like inflation.


Final Thoughts on Medigap Costs:

Medigap plan costs can vary quite a bit. From one insurance company to the next, a plan’s premium price may differ even when providing the very same coverage. Keep this in mind as you shop for the plan that is best for you.


Understanding Medigap and Medicare Advantage

Important! If you have a Medicare Advantage Plan, then you cannot also purchase a Medigap plan. These two plans do not work together.

If you have a Medigap policy and join a Medicare Advantage plan, then you will likely want to drop your Medigap policy. Your Medigap policy cannot be used to pay the copayments, deductibles, or premiums of your Medicare Advantage Plan.

How to Cancel Your Medigap Policy:


You can cancel your Medigap policy by contacting your insurance company.

Note: If you choose to cancel your Medigap policy, you might not be able to purchase that same policy in the future. This does not apply, however, if you have a guaranteed issue right.

If you are unhappy with your Medicare Advantage Plan, you can return to Original Medicare. You have the right to purchase a Medigap policy within 12 months of your return.

Beware: If you are not returning to Original Medicare, it is illegal for anyone to sell you a Medigap policy if you currently have a Medicare Advantage Plan.


Understanding Medigap and Medicare Part D

Important! If you have a Medicare Prescription Drug Plan (Part D), then you cannot also purchase a Medigap plan with drug coverage.

While you can have both plans simultaneously, both plans cannot have drug coverage.

If you already have a Medigap plan and decide to join a Medicare Prescription Drug Plan, you will need to inform your Medigap insurance provider, so that they can remove the prescription drug coverage from your Medigap policy.


As a result of removing this coverage, your Medigap premium will be adjusted to reflect the change.


Note: Once you choose to remove the prescription drug coverage from your Medigap policy, it cannot be recovered.


Creditable Drug Coverage:

Each year your Medigap plan provider must send you a notice confirming whether or not your prescription drug coverage is creditable. Creditable drug coverage means at least as good as basic Part D coverage.

Note: be sure to hold onto these notices in the event you choose to join a Medicare drug plan in the future.

When your Medigap policy has creditable drug coverage you have the option of joining a Medicare Prescription Drug Plan (Part D) during the Medicare Open Enrollment Period from October 15 to December 7.

If you have lost your Medigap policy, however, you can join a Medicare drug plan at any time.

When your Medigap policy does not have creditable drug coverage and you are joining a Medicare Prescription Drug Plan at a date later than when first eligible, you will likely have to pay a higher monthly premium.


This late penalty amount increases with every month that you wait to join a Part D plan.


Medigap Coverage While Traveling Abroad

Many Medigap policies offer you additional health care coverage when you travel outside of the United States. The Standard Medigap Plans C, D, F, G, M, and N all provide emergency healthcare coverage when traveling outside the U.S.

Plans E, H, I, and J also offer this coverage, though are no longer for sale. So, if you purchased one of these plans before June 1, 2010, then you also have this emergency coverage when traveling abroad.

Here is what that Medigap plan coverage looks like:

  • If Medicare doesn’t cover the costs of care, then emergency care begins during the first 60 days of your trip.

  • Once you meet a $250 deductible for the year, 80% of billed charges for certain medically necessary emergency care are paid.

  • Emergency coverage for foreign travel has a $50,000 lifetime limit.


Note: If you have any questions or concerns about your coverage, it’s always a smart idea to talk with your insurance agent or Medigap plan provider before traveling.


Medigap Scams and Illegal Practices

As you shop and compare Medigap plans, be aware of potential Medigap scams and other illegal practices that unfortunately do occur. Here are a few things to look out for:

First and foremost, you should never be pressured into buying a Medigap policy. You are the sole decision-maker when it comes to purchasing a Medigap policy. Similarly, you should never be pressured into switching to a new policy or insurance provider.

There are no Medigap policies that are officially part of Medicare or any other federal program so be sure to reject any offer from someone claiming to be selling such a policy. Every Medigap policy is sold by a private health insurance company.

Similarly, there are no Medicare representatives that sell Medigap policies or work for Medigap insurance companies. Reject any offer from someone claiming to be.

Also, be aware of anyone trying to sell you a Medigap plan in the following situations:

  • If you already have a Medigap plan that you are happy with and they are trying to sell you a second one.

  • If they know you already have Medicaid (some exceptions).

  • If they know you already have a Medicare Advantage Plan (this can only occur if your Medicare Advantage Plan is ending before your Medigap plan takes effect).

  • If the proposed Medigap plan can’t be legally sold in your state. If you are unsure, you can check with your State Insurance Department.

  • If they claim that a Medicare Advantage Plan is the same as a Medigap plan with Original Medicare. If you enroll in a Medicare Advantage Plan, you will be removed from Original Medicare coverage and no longer have the option of a Medigap plan.


If any of these scenarios happen to you, it is best to report the illegal activity. To do so, you can contact the Office of Inspector General Hotline.




Helpful Resources:

Medicare.gov: What is Medicare Supplement Insurance?

Medicare.gov: When Can I Buy Medigap?

Medicare.gov: How to Compare Medigap Policies