This article was updated on June 15. 2021.
If you are getting ready to enroll in Medicare, you may have heard about Medigap plans. What are Medigap plans, and how do they work?
Medigap, also called Medicare supplement insurance, is private insurance that can be added to Original Medicare. At age 65, beneficiaries usually choose to go with Original Medicare, Original Medicare plus Medigap, or a Medicare Advantage plan.
Medigap plans are a good way to get coverage for copays, coinsurance, deductibles, and other out-of-pocket costs associated with Medicare. Some Medigap plans may even cover healthcare received outside the U.S. For prescription drug coverage, you will need to get a Medicare Part D plan.
Medigap covers the gaps
As its name suggests, Medigap covers the “gaps” in insurance that Original Medicare does not cover, such as copayments, coinsurance, and deductibles, and is handled through a private insurance company. You can purchase a Medigap plan that fits your health needs by choosing from plans available in your state.
You will pay a monthly premium for your Medigap policy, in addition to the monthly premium you pay for Part B. Medigap premiums generally range from around $100 to $250 per month, but if you have a chronic illness or frequent doctor visits, the additional premium could save you money in the long run.
The rules for Medigap’s offerings and benefits vary by insurance company and by state. However, there are some similarities across Medigap Plans A through N.
Your Medigap policy covers only you, and not your spouse. Also note that if you have a Medicare Savings Account (MSA) Plan, it’s illegal for anyone to sell you a Medigap policy.
Any Medigap plan is guaranteed renewable as long as you pay your premiums.
10 types of plans
There are 10 types of Medigap plans to choose from, each signified by a letter. Note that plans are structured differently in Wisconsin, Massachusetts, and Minnesota. Plans are standardized by letter; for example, each Plan A will offer the same benefits no matter where you live. See the chart below to learn what each plan covers.
When and how to enroll
Open enrollment for a Medigap plan is six months from the first day of the month of your 65th birthday if you are signed up for Medicare Part B, or six months from the date you sign up for Part B.
You can purchase a Medigap policy from any insurance company in your state that is licensed to sell one. Do some research to see which one fits your needs. Visit Medicare’s Medigap Policy Search to find a Medigap plan in your area.
Plans F and C no longer available to new Medicare beneficiaries
In order to save Medicare money, Congress passed a bill on April 14, 2015, which eliminated Medigap Plans F and C starting January 1, 2020. These are the only two plans which cover the Part B deductible for new Medicare beneficiaries. Beneficiaries who had Plans F or C before 2020 will be able to keep them. In addition, people who were eligible for Medicare before 2020 but not yet enrolled will still be able to purchase a Plan F or C.
Medigap plan restrictions
If you don’t enroll when you’re first eligible, you could be denied Medigap coverage or have a 6-month delay in coverage due to factors like pre-existing conditions. This is called medical underwriting. Check to see if you are eligible for a plan. In Connecticut, Maine, Massachusetts, and New York, insurance companies are required to offer Medigap plans to those 65 and older without restrictions. In all other states, however, there are restrictions, especially when trying to switch back to Medigap from a Medicare Advantage plan.
On the other hand, there are cases when you are guaranteed the right to purchase a Medigap plan. These are called guaranteed issue rights. Check beforehand to see if you are eligible.
Just like Medicare, Medigap plans will not cover long-term care, vision care, dental care, hearing aids, glasses, or private-duty nursing.