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Medicare Supplement Insurance Policies (Medigaps)

Medicare Supplement Insurance policies are also referred to as Medigap policies. Original Medicare (Part A and Part B) pays for many, but not all healthcare services and supplies (see the articles titled: Medicare Part A Defined and Medicare Part B Defined to learn more about what is covered and what beneficiaries are responsible for). Medigap policies are sold by Medicare-approved, private insurance companies and can help pay some of the health care costs that Original Medicare does not cover such as copayments, coinsurance and deductibles.

If you have Original Medicare and you purchase a Medigap/Supplement policy, Medicare will pay its share of the Medicare-approved amount for your covered health care costs, and then your Medigap policy pays its share.

Insurance companies are only permitted to sell “standardized” policies, identified in most states by the letters A through N. This law was passed in order to take away some of the confusion of choosing a policy. All policies offer the same basic benefits but some offer additional ones, so you are able to choose which plan best meets your needs and budget. (In MA, MN and WI, policies are standardized differently.)

It Pays to Shop Around

Different insurance companies typically charge different premiums for the same exact policy. As you shop for a suitable policy, be sure that you are comparing the same policy, such as a Plan G from one company with the same Plan G from another company. Also check the insurance company ratings. You may also wish to learn about a company’s annual premium increase history because buying the least expensive policy today may not necessarily pay off in the long-run.

Click here for a downloadable, hypothetical Standardized Medicare Supplement Chart to get a visual overview of how the standardization process works.

More about Medigap Policies

It’s important to remember that you must have “Original Medicare” (Part A and Part B) before you can buy a Medigap policy. In so doing, you will pay a monthly premium for your Medigap policy in addition to your monthly Part B premium (one to Uncle Sam and the other to your private insurance company). Also, a Medigap policy only covers one person, so spouses will each have to buy individual policies.

You should also compare Medigap policies since the costs can vary greatly and will typically increase annually. Also, you cannot purchase a Medigap policy if you are in a Medicare Advantage Plan (Medicare Part C).

When to Buy

The best time to buy a Medigap policy in most states is during your initial Open Enrollment period which is the 6-month period beginning on the first day of the month in which you turn 65 and enrolled in Part B. At this time you can purchase any policy you wish from any company without having to medically qualify. This “guaranteed issue period” is of particular importance to those with major health issues because they would be able to receive the same “standard rates” as those with no serious health conditions.

After this enrollment period ends, your option to buy a Medigap policy may be limited and can cost more based on age and health conditions.

If you have group health coverage based on your (or your spouse’s) current employment, your Medigap Open Enrollment Period will start when you sign up for Part B. Be sure to check with your state for local requirements.

If in a Medicare Advantage Plan

If you have a Medigap policy and join a Medicare Advantage Plan (Part C), you may want to drop your Medigap policy. By law it cannot be used in conjunction with a Medicare Advantage Plan, so you would be wasting premium dollars on a policy that would not pay on any claims. To cancel your Medigap policy, contact your insurance company.

It’s illegal for anyone to sell you a Medigap policy if you have a Medicare Advantage Plan, unless you are purposely switching back to Original Medicare (Part A and Part B). If you want to switch to Original Medicare and buy a Medigap policy, contact your Medicare Advantage Plan to cancel.

If you join a Medicare Advantage Plan for the first time, and are not happy with it, you will have special rights to buy a Medigap policy if you return to Original Medicare within 12 months of joining.

If you had a Medigap policy before you joined, it may be possibly to get the same policy back if the company still sells it. If it isn’t available, you can buy another one.

The Medigap policy can no longer have prescription drug coverage even if you had it before, but you may be able to join a Medicare Prescription Drug Plan (Part D).

If you joined a Medicare Advantage Plan when you were first eligible for Medicare, you can choose from any Medigap policy.

For additional information about Medicare Supplement Insurance Visit ww.medicare.gov/publications to view the booklet “Choosing a Medigap Policy: A Guide to Health Insurance for People with Medicare.” You can also call 1‑800‑MEDICARE (1‑800‑633‑4227) to ask for a copy to be mailed to you. TTY users should call 877‑486‑2048. Visit www.medicare.gov/Medigap for a wealth of info. You may also call your State Insurance Department. Visit www.medicare.gov/contacts or call 1-800-MEDICARE to get the phone number. Call your State Health Insurance Assistance Program (SHIP) if available in your state: they usually have some very helpful, local volunteers.

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