Medicare Supplement insurance, commonly referred to as “Medigap,” is a private form of medical insurance that covers the gaps left by Medicare. You can buy a Medigap policy to pay for Original Medicare deductibles, co-payments, co-insurance, and other costs.
There are10 standardized Medigap plan options to choose from in most states. (Minnesota, Massachusetts, and Wisconsin have different options.) The basic benefits offered by Medicare Supplement insurance plan options are regulated by the federal government, but you buy the plans from private insurance companies, not the government.
Basic benefits of Medigap plans
There are 9 different types of expenses that Medicare Supplement insurance policies can cover. Each standardized Medigap plan option has a different combination of benefits. Plan F is the only plan that covers all 9 types of expenses.
All Medigap plan options cover the following 4 Medicare costs:
- Part A hospital care co-insurance
- Part A hospice care co-insurance or co-payment
- Part B co-insurance or co-payment
- First 3 pints of blood
Some plan options cover some or all of the following 5 Medicare costs:
- Part A deductible
- Part B deductible
- Part B excess charges
- Part A skilled nursing care co-insurance
- Foreign travel emergency care
Medicare Supplement insurance eligibility
To be eligible for Medicare Supplement insurance, you must be:
- Enrolled in Medicare Parts A & B (Original Medicare)
- 65 or older, or have a disability
If you are outside of your Medigap open enrollment period and have had serious health problems, it may be more difficult for you to buy a Medigap policy.
Medigap plan options
Medigap plans are standardized in all but three states. (Massachusetts, Minnesota, and Wisconsin have different options.)
There are 10 standardized Medigap plan options currently available for purchase in most states. Each option is referred to by a different letter: A, B, C, D, F, G, K, L, M, and N. Every plan with the same letter has the same benefits, no matter which company you buy from. That means Plan A from one insurance company includes the exact same benefits as Plan A from a different insurance company. The only difference is price and who is providing the coverage.
Certain plans are more popular than others. Medigap Plan F is the most popular plan. About 56% of Medigap policyholders have Plan F.1 Plan M is the least popular option.
Comparing Medigap policy quotes
You should compare plan options and insurance companies before buying a Medicare Supplement insurance policy. To compare quotes, do the following:
- Pick a plan option that provides sufficient benefits.
- Gather the information you will need for a quote.
- Review age-related pricing structures so you will understand how costs may change as you age.
- Find companies that offer the Medigap plan option you want and compare quotes.
Buying a Medicare Supplement insurance plan
You should buy a Medigap policy during the open enrollment period to avoid getting higher costs or being denied a policy.
Your Medigap open enrollment period starts the day you are both 1) 65 years old and 2) enrolled in Original Medicare (both Parts A & B). The open enrollment period lasts for 6 months. If you only bought Part A when you turned 65, the 6-month period starts the day you buy Part B. However, there are some situations where you can buy a policy with the same protections as during open enrollment.
Medicare Supplement vs. Medicare Advantage
Medicare Supplement policies and Medicare Advantage plans serve two different purposes. Medicare Supplement policies cover deductibles, co-payments, and other costs that Medicare doesn’t cover. Medicare Advantage plans are an alternative way to get Medicare benefits while also getting extra coverage not provided through Original Medicare.
You cannot have a Medicare Supplement policy and a Medicare Advantage policy at the same time.
1 https://www.ahip.org/wp-content/uploads/2016/04/MedigapEnrollmentReport_Linked.pdf
