Medigap
Medigap Insurance is a complex topic and overwhelming for most people. This is a basic guide to help you understand Medigap Insurance, also known as Supplemental Insurance.
What’s a Medigap policy?
A Medigap policy is an insurance policy that helps fill "gaps" in Original Medicare and is sold by private companies. Medigap policies can help pay for some of the costs that Original Medicare doesn't, like copayments, coinsurance, and deductibles.
Some Medigap policies also cover certain benefits Original Medicare doesn’t cover, like emergency medical care when you travel outside the U.S. (foreign travel emergency services). Medigap policies don’t cover your share of the costs under other types of health coverage, including Medicare Advantage Plans, stand-alone Medicare drug plans, employer/union group health coverage, Medicaid, or TRICARE.
If you have Original Medicare and a Medigap policy, Medicare will pay its share of the Medicare-approved amount for covered health care costs. Then, your Medigap policy pays its share. Medicare doesn't pay any of the costs of buying a Medigap policy.
A Medigap policy is different from a Medicare Advantage Plan because those plans are another way to get your Part A and Part B benefits, while a Medigap policy only helps pay for the costs that Original Medicare doesn't cover. Insurance companies generally can’t sell you a Medigap policy if you have coverage through a Medicare Advantage Plan or Medicaid.
All Medigap policies must follow federal and state laws designed to protect you, and policies must be clearly identified as “Medicare Supplement Insurance.” Medigap policies are standardized, and in most states are named by letters, Plans A–N. Each standardized Medigap policy under the same plan letter must offer the same basic benefits, no matter which insurance company sells it.
Cost is usually the only difference between Medigap policies with the same plan letter sold by different insurance companies.
What Medigap policies cover
The chart on below gives you a quick look at the standardized Medigap plans available. You can also find out which insurance companies sell Medigap policies in your area by visiting Medicare.gov/medigap-supplemental-insuranceplans. If you need help comparing and choosing a policy, call your State Health Insurance Assistance Program (SHIP) for help.
• Every insurance company selling Medigap policies must offer Plan A. If they want to offer policies in addition to Plan A, they must also offer either Plan C or Plan F to individuals who aren't new to Medicare and either Plan D or Plan G to individuals who are new to Medicare. Not all types of Medigap policies may be available in your state.
• Plans D and G with coverage starting on or after June 1, 2010, have different benefits than Plans D or G bought before June 1, 2010.
• Plans E, H, I, and J are no longer sold, but if you already have one, you can generally keep it.
• Since January 1, 2020, Medigap plans sold to people new to Medicare aren't allowed to cover the Part B deductible. Because of this, Plans C and F are no longer available to people new to Medicare on or after January 1, 2020.
– If you already have either of these two plans (or the high deductible version of Plan F) or you were covered by one of these plans before January 1, 2020, you'll be able to keep your plan. If you were eligible for Medicare before January 1, 2020, but not yet enrolled, you may be able to buy one of these plans.
– For this situation, people new to Medicare are people who turned 65 on or after January 1, 2020, and people who get Medicare Part A (Hospital Insurance) on or after January 1, 2020.
In Massachusetts, Minnesota, and Wisconsin, Medigap policies are standardized in a different way. In some states, you may be able to buy another type of Medigap policy called Medicare SELECT. Medicare SELECT are standardized plans that may require you to use certain providers and may cost less than other Medigap plans.
This chart shows basic information about the different benefits that Medigap plans cover. If a percentage appears, the Medigap plan covers that percentage of the benefit, and you must pay the rest. If a box is blank, the plan doesn't cover that benefit.
* Plans F and G also offer a high-deductible plan in some states (Plan F isn't available to people new to Medicare on or after January 1, 2020.) If you get the high-deductible option, you must pay for Medicare covered costs (coinsurance, copayments, and deductibles) up to the deductible amount of $2,700 in 2023 before your policy pays anything, and you must also pay a separate deductible ($250 per year) for foreign travel emergency services.
**Plans K and L show how much they'll pay for approved services before you meet your out-of-pocket yearly limit and your Part B deductible ($226 in 2023). After you meet these amounts, the plan will pay 100% of your costs for approved services for the rest of the calendar year.
*** Plan N pays 100% of the Part B coinsurance, except for a copayment of up to $20 for some office visits and up to a $50 copayment for emergency room visits that don’t result in an inpatient admission.
What Medigap policies don’t cover
Generally, Medigap policies don’t cover:
• Long-term care (like non-skilled care you get in a nursing home)
• Vision or dental services
• Hearing aids
• Eyeglasses
• Private‑duty nursing
Types of coverage that aren't Medigap policies
• Medicare Advantage Plans (also known as Part C)
• Medicare drug plans (Part D)
• Medicaid
• Employer or union plans, including the Federal Employees Health Benefits Program (FEHBP)
• TRICARE
• Veterans’ benefits
• Long-term care insurance policies
• Indian Health Service, Tribal, and Urban Indian Health plans
• Qualified Health Plans sold in the Health Insurance Marketplace®
What types of Medigap policies can insurance companies sell?
In most cases, Medigap insurance companies can sell you only a standardized Medigap policy. All Medigap policies must have specific benefits, so you can compare them easily.
Insurance companies that sell Medigap policies don’t have to offer every Medigap plan. Each insurance company decides which Medigap plans it wants to sell, although federal and state laws might affect which ones they can offer.
In some cases, an insurance company must sell you a Medigap policy if you want one,
even if you have health problems. You're guaranteed the right to buy a Medigap policy
during certain times:
• When you’re in your Medigap Open Enrollment Period
• If you have a guaranteed issue right
You may be able to buy a Medigap policy at other times, but the insurance company can deny you a Medigap policy based on your health. Also, in some cases, it may be illegal for the insurance company to sell you a Medigap policy.
What do I need to know if I want to buy a Medigap policy?
• You must have Medicare Part A (Hospital Insurance) and Medicare Part B
(Medical Insurance).
• If you have a Medicare Advantage Plan but are planning to return to Original Medicare, you can apply for a Medigap policy before your coverage ends. The Medigap insurance company can sell it to you as long as you’re leaving the Medicare Advantage Plan. Ask that the new Medigap policy start when your Medicare Advantage Plan enrollment ends, so you’ll have continuous coverage.
• You pay the private insurance company a premium for your Medigap policy in addition to the monthly Part B premium 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 Medigap policies.
• When you have your Medigap Open Enrollment Period, you can buy a Medigap policy from any insurance company that’s licensed in your state.
• Any new Medigap policy issued since 1992 is guaranteed renewable even if you have health problems. This means the insurance company can’t cancel your Medigap policy as long as you stay enrolled and pay the premium.
• Some states may have laws that give you additional protections.
• Different insurance companies may charge different premiums for the same exact Medigap plan type. As you shop for a policy, be sure you’re comparing policies under the same plan type (for example, compare Plan A from one company with Plan A from another company).
• Although some Medigap policies sold in the past covered prescription drugs, Medigap policies sold after January 1, 2006, aren’t allowed to include prescription drug coverage. If you want drug coverage, you can join a Medicare drug plan offered by private companies approved by Medicare. To learn about Medicare drug coverage, visit Medicare.gov, or call 1-800-MEDICARE (1-800-633-4227). TTY users can call 1-877-486-2048.
When's the best time to buy a Medigap policy?
The best time to buy a Medigap policy is during your Medigap Open Enrollment Period. This period lasts for 6 months and begins on the first day of the month you’re both 65 or older and enrolled in Medicare Part B. Some states have additional Open Enrollment Periods including those for people who are under 65. If you’re under 65 and have Medicare because of a disability or End-Stage Renal
Disease (ESRD), you might not be able to buy the Medigap policy you want, or
any Medigap policy, until you turn 65.
During the Medigap Open Enrollment Period, an insurance company can’t use medical underwriting to decide whether to accept your application. This means the insurance company can’t do any of these because of your health problems:
• Refuse to sell you any Medigap policy it offers
• Charge you more for a Medigap policy than they charge someone with no health problems
• Make you wait for coverage to start (except as explained below)
While the insurance company can’t make you wait for your coverage to start, it may be able to make you wait for coverage related to a pre-existing condition. A pre-existing condition is a health problem you have before the date a new insurance policy starts. In some cases, the Medigap insurance company can refuse to cover your out-of-pocket costs for these pre-existing health problems for up to 6 months. This is called a “pre-existing condition waiting period.” After
6 months, the Medigap policy will cover the pre-existing condition.
Coverage for a pre-existing condition can only be excluded if the condition was treated or diagnosed within 6 months before your Medigap policy coverage starts. This is called the “look-back period.” Remember, for Medicare‑covered services, Original Medicare will still cover the condition, even if the Medigap policy won’t, but you’re responsible for the Medicare coinsurance or copayment.
Creditable coverage
It’s possible to avoid or shorten your waiting period for a pre-existing condition if:
• You buy a Medigap policy during your 6-month Medigap Open Enrollment Period.
• You’re replacing certain kinds of health coverage that counts as “creditable coverage.”
Prior creditable coverage is generally any other health coverage you recently had before applying for a Medigap policy. If you’ve had at least 6 months of continuous prior creditable coverage, the Medigap insurance company can’t make you wait before it covers your pre-existing conditions.
There are many types of health coverage that may count as creditable coverage for Medigap policies, but they’ll only count if you didn’t have a break in coverage for more than 63 days.
Your Medigap insurance company can tell you if your previous coverage will count as creditable coverage for this purpose. You can also call your State Health Insurance Assistance Program (SHIP).
If you buy a Medigap policy when you have a guaranteed issue right (also called “Medigap protection”), the insurance company can’t use a pre‑existing condition waiting period.
Why is it important to buy a Medigap policy when I’m first eligible?
During your Medigap Open Enrollment Period, you have the right to buy any Medigap policy offered in your state. In addition, you'll generally get better prices and more choices among policies. If you apply for Medigap coverage after your Open Enrollment Period, there’s no guarantee that an insurance company will sell you a Medigap policy if you don’t meet the medical underwriting requirements, unless you’re eligible for guaranteed issue rights (Medigap protections).
It’s also important to understand that your Medigap rights may depend on when you choose to sign up for Medicare Part B. If you’re 65 or older, your Medigap Open Enrollment Period begins when you sign up for Part B, and it can’t be changed or repeated. After your Medigap Open Enrollment Period ends, you may be denied a Medigap policy or charged more for a Medigap policy due to
past or present health problems.
In most cases, it makes sense to sign up for Part B and buy a Medigap policy when you’re first eligible for Medicare, because you might otherwise have to pay a Part B late enrollment penalty and might miss your 6-month Medigap Open Enrollment Period. However, there are exceptions if you have employer coverage.
Employer coverage
If you have group health coverage through an employer or union, because either you or your spouse is currently working, you may want to wait to sign up for Part B. Benefits based on current employment often provide coverage similar to Part B, so you wouldn’t want to pay for Part B before you need it, and your Medigap Open Enrollment Period might expire before a Medigap policy would be useful. When the employer coverage ends, you’ll have a chance to sign up for Part B without a late enrollment penalty, which means your Medigap Open Enrollment Period will start when you’re ready to take advantage of it. If you or your spouse is still working and you have coverage through an employer, contact your employer or union benefits administrator to find out how your insurance works with Medicare.
How do insurance companies set prices for Medigap policies?
Each insurance company decides how it’ll set the price, or premium, for its Medigap policies. The way they set the price affects how much you pay now and in the future. Each Medigap policy can be priced or "rated" in one of three ways:
1. Community-rated (also called “no-age-rated”)
2. Issue-age-rated (also called “entry-age-rated”)
3. Attained-age-rated
Each of these ways of pricing Medigap policies is described in the chart on the next page. The examples show how your age affects your premiums, and why it’s important to look at how much the Medigap policy will cost you now and in the future. The amounts in the examples aren’t actual costs.
Other factors like where you live, medical underwriting, and discounts can also affect the amount of your premium.
