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Your Guide to Medigap and Other Medicare Supplement Plans

Medigap is Medicare supplemental insurance. Private insurance companies sell these policies. They are designed to help cover the gaps in healthcare costs with original Medicare, such as deductibles, co-payments, and co-insurance. It can also help with services Medicare does not cover, including travel outside the U.S.

Why You Might Need Medigap Insurance

Original Medicare Parts A and B will not cover all expenses if you become ill. The purpose of a Medigap policy is to cover all or a portion of those charges that would otherwise be paid out of pocket. What Medicare will not cover can be substantial, particularly in the case of long-term hospitalization or extensive treatment. A Medigap plan allows you to be reimbursed for healthcare costs you pay directly.

How Does It Work if You Have Medicare and a Medigap Policy?

If you have original Medicare and buy a supplemental Medigap policy, Medicare will pay its share of your healthcare costs first. Then, your Medigap policy pays its share of your covered expenses. Each Medigap policy covers only one person. Spouses must purchase separate policies. Medigap does not cover prescription drugs. For that, you need a Medicare Part D prescription drug plan.

Are Medigap Insurance Policies Standardized?

The federal government requires private insurance companies to offer standardized Medigap policies. There are 12 government-approved standardized plans, identified as A, B, C, D, F, F-High Deductible, G, G-High Deductible, K, L, M, and N. 

For individuals who become newly eligible for Medicare in 2020 or later, Medigap plans C, F, and F-High Deductible will no longer be available. These plans cover the Medicare Part B deductible ($203 in 2020). In 2015, Congress passed legislation to disallow such coverage. Individuals already enrolled in these plans will be able to keep them going forward. Also, anyone who was eligible for Medigap before 2020 and did not buy such a plan will still be able to purchase one. 

When To Buy Medigap Insurance

You can purchase a Medigap insurance policy during your six-month Medigap Open Enrollment. This period begins the month you turn 65 years of age and are enrolled in Medicare Part B. During Medigap Open Enrollment, you are eligible to purchase any Medigap policy sold in your state at the same price as someone in good health, even if you suffer from one or more health conditions. After this period has passed, you may not be able to buy a Medigap policy. If you can purchase this insurance, it may cost more if you have health problems now or have had them in the past. 

There are more options available with Medicare today, including Medicare Advantage Plans and Medigap insurance. If you have become eligible for Medicare, you have a limited window of opportunity to make certain important decisions, such as whether to purchase a Medigap policy. It can be a complicated and confusing process to choose the types of coverage best suited to your needs. If you would like some assistance, speak with our experienced agent for professional advice.