Medigap Insurance

What Is Medigap Insurance?

A Medigap Insurance policy, is a policy sold by certain private companies that will help pay some of the health care costs that original Medicare does not cover like insurance co-payments, coinsurance, and insurance deductibles. Some Medigap policies offer coverage for additional services that original Medicare does not cover such as medical care when you travel outside of the U.S. If you have original Medicare and you buy a Medigap policy, Medicare will pay its portion of the Medicare approved amount for covered health care costs then your Medigap policy pays its portion. A Medigap policy is different from a Medicare Advantage Plan. Those plans provide Medicare benefits while a Medigap policy only provides a supplement to your original Medicare benefits.

 8 things to know about Medigap policies

  1. You must have Medicare Part A and Part B.
  2. If you have a Medicare Advantage Plan, you can apply for a Medigap policy, but do make sure you will be able to leave the Medicare Advantage Plan before your Medigap policy begins.
  3. You pay the private insurance company a monthly premium for your Medigap policy in addition to the monthly Part B premium that you pay to Medicare.
  4. A Medigap policy only covers one person. If you and your spouse both want Medigap coverage, you will each have to buy an individual/separate policy.
  5. You can buy a Medigap policy from any insurance company that is licensed in your state to sell the product.
  6. Any standardized Medigap policy is guaranteed renewable even if you have health problems. This means the insurance company can not cancel your Medigap policy as long as you pay the premium.
  7. Some Medigap policies sold in the past cover prescription drugs but Medigap policies sold after January 1, 2006 are not allowed to include prescription drug coverage. If you want prescription drug coverage, you can join a Medicare Prescription Drug Plan (Part D).
  8. It is illegal for anyone to sell you a Medigap policy if you have a Medicare Medical Savings Account (MSA) Plan.

Medigap policies don’t cover everything.

Medigap insurance policies generally do not cover long term care, vision care, dental care, hearing aids, eye glasses, or private duty nursing.

Insurance plans that are not Medigap plans.

Some types of insurance are not Medigap plans. They include:

  • Medicare Advantage Plans (like an HMO, PPO, or Private Fee-for-Service Plan)
  • Medicare Prescription Drug Plans (Part D)
  • Medicaid
  • Employer or Union plans which include the Federal Employees Health Benefits Program (FEHBP)
  • Tricare
  • Veteran’s benefits
  • Long-term care insurance policies
  • Indian Health Service, Tribal, and Urban Indian Health plans

Dropping your Medigap policy (not just the drug coverage)

If you decide to drop your Medigap policy, be careful about the timing. For example, you might want a completely different Medigap insurance policy (not just your old Medigap policy without the prescription drug coverage). Or, you may decide to switch to a Medicare Advantage Plan that offers prescription drug coverage. If you drop your Medigap policy and the drug coverage was not creditable prescription drug coverage, or if you go 63 days or more in a row before your new Medicare drug coverage begins, you have to pay a late enrollment penalty when you join a new Medicare drug plan.

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