What is a Medicare Supplement Insurance Plan?
A Medicare Supplement (Medigap) is a health insurance policy that you purchase from private health insurance companies to fill the “gaps” in your original Medicare Part A coverage. The options can seem overwhelming at first, but it’s fairly simple to narrow down the options.
In general, Medicare A pays 80% of beneficiaries’ inpatient hospital costs, and Medicare B pays 80% of their outpatient expenses. Beneficiaries pay the remaining 20%, as well as the various Medicare deductibles. There’s no limit on how your out-of-pocket expenses can be under Original Medicare – the 20% coinsurance is unlimited. But a Medigap plan will pick up where Original Medicare leaves off, greatly limiting an insured’s out-of-pocket exposure.
There are ten different Medigap plans available, each one designated by a different letter (A, B, C, D, E, F, G, K, L, M, and N; in addition, Plan F is available as a high deductible plan – if you purchase that option, you’ll pay $2,180 in Medicare costs in 2015 before your Medigap policy kicks in). Medigap policies are standardized across all carriers, which means that you can easily compare apples to apples – a plan F from one carrier will provide the same benefits as a plan F from another carrier.
In most cases, Medigap plans pay benefits only for services that are covered by Medicare – that is, they pick up the excess charges that Medicare doesn’t cover, but only for services that are covered under Medicare. So things like dental care, hearing aids, and custodial long-term care are not covered under Medigap policies, since they aren’t covered by Original Medicare. But six of the plans (C, D, F, G, M, and N) do include coverage for emergency care during foreign travel, which is not covered by Original Medicare.
Learn more about these other Medicare options:
When Am I Eligible?
If you’re enrolled in Original Medicare, you have a six-month open enrollment window for Medigap that starts on the first day of the month you turn 65 and are enrolled in Medicare Part B. If you wait to enroll in Part B (because you’ve still got employer sponsored coverage, for example), your Medigap open enrollment period begins when you enroll in Part B.
During the open enrollment window, Medigap plans are guaranteed issue, which means that carriers cannot deny your application or charge you a higher premium based on your medical history (although they can still impose a waiting period of up to six months for pre-existing conditions, if you didn’t have creditable coverage prior to enrolling the Medigap plan). If you don’t enroll during your open enrollment window, you’ll be subject to medical underwriting if you choose to enroll in a Medigap plan at a later date, which means that your enrollment could be denied or you could be charged a higher premium based on your medical history.
There are some circumstances that allow you guaranteed access to Medigap coverage after your initial enrollment window, but they’re relatively limited (unlike Medicare Advantage and Medicare Part D, which have annual open enrollment periods). They include:
- A permanent move to a new area.
- Loss of employer-sponsored coverage that payed after your Medicare coverage.
- Your Medicare Advantage plan goes bankrupt, stops offering service in your area, or you move out of their area.
- You enrolled in Medicare Advantage when you were first eligible, OR you dropped your Medigap plan to switch to Medicare Advantage, and you’ve decided to switch to Original Medicare within one year of enrolling in the Medicare Advantage plan. If you switch back to Original Medicare after more than a year on Medicare Advantage, you’ll have access to a guaranteed-issue Medicare Part D (prescription) plan, but not a Medigap plan (unless you’re leaving the Medicare Advantage plan because you were misled or the carrier didn’t follow applicable regulations).
You cannot get a Medigap plan if you’re enrolled in a Medicare Advantage plan, TRICARE, Veterans Administration (VA) benefits, or benefits from a former employer or union – you must be enrolled in Original Medicare in order to purchase a Medigap policy.
Finding the right plan for you
That’s where we begin to help. But even after you’ve signed up for a plan, we’ll help you with any questions you have about your policy or problems with billing or claims. More about Medicare supplements and retiree insurance.
The convenient thing about comparing Medicare Supplement plans from various insurance companies is that the benefits are the exact same. The only thing that varies is the premiums they charge as well as other variables like the stability of the insurance company, etc. We work with various carriers, like Anthem Blue Cross Blue Shield, AARP, Humana, Mutual of Omaha, Transamerica Life, United Healthcare, and more.