What is Medigap?
Medigap is supplemental health insurance coverage added to your Medicare to fill the “gaps” in Original Medicare coverage. Medigap helps pay some of your health care costs that traditional Medicare does not cover. Once you have original Medicare, you can sign up for a Medigap policy. Medicare and Medigap will work together to pay their share of covered health care costs.
You must have Medicare Parts A and B in order to get a Medigap policy. You will pay the monthly Medicare Part B premium, and a premium to your Medigap insurance company. Medigap is guaranteed renewable, as long as you pay your premium. It is also automatically renewed each year. This means your coverage will continue year after year for as long as you pay your premium. However, in some states, Medigap providers may refuse to renew a Medigap policy bought before 1992.
Medigap plans must comply with Federal and State laws. Providers can only sell you a “standardized” Medigap policy. These laws are intended to protect you. A Medigap policy must clearly label itself as “Medicare Supplement Insurance.”
Generally, the only difference between Medigap plans is the cost. Costs can vary between plans. Comparing between plans is the best way to get a low-cost plan. Standardized policies must provide the same benefits.
What’s Covered?
Medigap covers some of the out-of-pocket costs you pay in Original Medicare, such as:
Some Medigap policies also cover services that Original Medicare doesn’t cover, like emergency medical care when traveling outside the U.S.
What’s not covered?
Medigap does not cover certain services, such as:
- Long-term care (such as nursing homes)
- Vision or dental care
- Hearing aids
- Eyeglasses
- Private-duty nursing
How Does Medigap Work?
A Medigap policy covers only one individual. If you and your spouse both want Medigap coverage, you must both purchase Medigap. You can purchase Medigap once you have Medicare Parts A and B.
When covered by Medigap, Medicare will first pay its part of Medicare-covered health care costs. Usually, your Medigap provider gets your Part B claim information directly from Medicare. Your Medigap provider will then pay it’s portion of the Medicare-approved amount for covered services. You will then pay what is left. Sometimes, your Medigap coverage will similarly pay for Part A claims.
If your Medigap provider doesn’t get your claims directly from Medicare, ask your doctors if they “participate” in Medicare. Participating in Medicare means they will “accept assignment” for Medicare patients. If your doctor participates or accepts assignment, your Medigap insurance company is required to pay your doctor directly.
Regardless of your health condition, your Medigap will renew automatically each year. Your Medigap provider can only deny you coverage if:
- You stop paying your premiums
- You lied on the Medigap application
- The provider goes bankrupt or goes out of business
Medigap Costs
Comparing Medigap costs
The benefits in each lettered plan are always the same, whether it’s part F, G, K or otherwise. The only difference between plans of the same part is the monthly premium. There can be big differences in the premiums that companies charge for the same coverage. For best rates, compare between Medigap plans with the same letter (for example, compare Plan G from one company with Plan G from another company).
Medigap plans will show you their estimated costs. If you are considering a plan that looks right for you, you can contact the provider for a more accurate price.
Some of the ways that costs can vary are if the provider:
- Offers discounts (such as discounts for women, non-smokers, or married people, discounts for paying yearly or through electronic funds transfer, or discounts for multiple policies).
- Uses medical underwriting.
- applies a different premium when you don’t have a guaranteed issue right or aren’t in your Medigap Open Enrollment Period.
- Sells Medicare SELECT policies that may require you to use certain providers. If you buy this type of Medigap policy, your premium may be lower.
- Offers a high-deductible option.
When you buy a Medigap policy, you’ll pay the provider a monthly premium. Your provider will let you know how to pay for your monthly premium. You also have to pay your monthly Medicare Part B premium. Medicare doesn’t pay the premiums for your Medigap policy. Premium amounts typically increase each year.
How is Medigap different from Medicare Advantage (Part C)?
Medigap is supplemental coverage to traditional Medicare. A Medicare Advantage Plan is bundled Medicare coverage offered by private insurance companies. If you have Medicare, you can either add Medigap coverage, or enroll in Medicare Advantage. You cannot have both Medigap and Medicare Advantage.
If you have Medicare Advantage, you cannot get Medigap unless you switch back to Original Medicare. Additionally, you can’t use Medigap to pay for Medicare Advantage costs.
Importantly, if you drop Medigap to join Medicare Advantage, you can re-enroll in the same Medigap policy within a 12 month period if the Medigap provider still sells it, if you return to Original Medicare. If it’s not available, you can purchase a different Medigap plan or Part D plan after returning to Original Medicare.
Most Medigap plans don’t include prescription drug coverage. If you need prescription drug coverage, you can either:
- Get a Part D plan added to your Original Medicare
- Get a Medicare Advantage plan
How do I choose between Medigap & Medicare Advantage?
There are a few things to consider when choosing between Medigap and Medicare Advantage. Considering these options will give you the best chance at getting a plan that is right for you.
The advantages of Original Medicare and supplemental coverage, you can use any doctor and facility that accepts Medicare. Supplemental coverage will help you may some health care costs not covered by Medicare. It is also guaranteed renewable, and coverage is standardized.
However, the disadvantages to Medigap coverage are higher premiums. You also must purchase Part D separately, if needed. Additionally, it can be very difficult to switch once enrolled in a plan.
The advantages of Medicare Advantage start with low, or even no cost premiums. Additionally, most MA plans will include Part D coverage for your prescription drugs. Some plans will even include extra benefits, such as dental and vision coverage, gym memberships, flex card allowance, or more. It also keeps all your benefits and coverage in one place.
The main disadvantage to Medicare Advantage is the limitation on provider networks. You often must use in-network doctors or facilities to keep your costs low.
If you need additional help determining what is right for you, speak to one of our Medicare Advocates! We are licensed in all 50 states to bring you the best plans from the most trusted carriers in your area. Give us a call, and we can help you get the coverage your health requires!
