Medicare Supplement plans, also known as Medigap, are policies that help pay for excess charges left over by Medicare. These plans help you pay for out-of-pocket costs for services covered under Medicare Part A and Part B.
Some of the remaining healthcare costs a Medicare Supplement policy can help pay include:
Essentially, Medigap is Medicare Supplement Insurance that helps fill “gaps” in Original Medicare and is sold by private companies. While Original Medicare pays for a lot of the costs for healthcare services and supplies, it doesn’t pay for it all.
Some Medigap policies also cover services that Original Medicare doesn’t cover, like medical care when you travel outside the U.S. This is especially helpful for those who have an extensive bucket list to fulfill while in retirement, or frequently travel internationally.
If you have Original Medicare and you buy a Medigap policy, Medicare pays its share of the Medicare-approved amount for covered healthcare costs. Then, your Medigap policy pays its share.
Eight things to know about Medigap policies:
- You must have Medicare Part A and Part B.
- A Medigap policy is different from a Medicare Advantage Plan. Those plans are ways to get Medicare benefits, while a Medigap policy only supplements your Original Medicare benefits.
- You pay the private insurance company a monthly premium for your Medigap policy. You pay this monthly premium in addition to the monthly Part B premium that you pay to Medicare.
- A Medigap policy only covers one person. If you and your spouse both want Medigap coverage, you’ll each have to buy separate policies.
- You can buy a Medigap policy from any insurance company that’s licensed in your state to sell one.
- Any standardized Medigap policy is guaranteed renewable even if you have health problems. This means the insurance company can’t cancel your Medigap policy as long as you pay the premium.
- Some Medigap policies sold in the past cover prescription drugs. But, Medigap policies sold after January 1, 2006 aren’t allowed to include prescription drug coverage. If you want prescription drug coverage, you can join a Medicare Prescription Drug Plan (Part D).
- It’s illegal for anyone to sell you a Medigap policy if you have a Medicare Advantage Plan, unless you’re switching back to Original Medicare.
How do I Enroll in Medigap Insurance?
Once you have Medicare Part B, you have six months to enroll in a Medicare Supplement plan with no health questions.
This is a one-time open enrollment in which you cannot be turned down for any health conditions. You can’t be asked any medical questions or be charged an additional premium for health reasons.
Once this one-time enrollment is over, insurance companies can begin to refuse you based on health, which is why it is so important to remember and apply during open enrollment.
Who is Eligible for Medigap Insurance?
To be eligible for a Medicare Supplement insurance plan, you must first enroll in Medicare. Medicare Part A and Part B are generally available to Citizens of the USA or permanent legal residents for at least five continuous years who have any one of the following qualifications:
- Aged 65 and older
- Diagnosed with End-Stage Renal Disease (ESRD – permanent kidney failure requiring dialysis or transplant)
- Receiving disability benefits from the Social Security Administration or the Railroad Retirement Board
Generally, you’re eligible for Medicare after receiving disability benefits for 24 months in a row.