Medigap Insurance Plan Basics

Medicare helps a large number of Americans be able to receive the healthcare that they need. However, sometimes there are still gaps in Medicare plans that still require patients to pay deductibles, copayments, and coinsurance amounts. For some patients, it can be a large burden to fill in these financial gaps.

With this in mind, some private insurance companies have created Medigap insurance plans, also known as a Medicare supplement. Medigap plans can help cover what Medicare does not, including medical care when traveling outside of the United States. Purchasing a Medigap policy will allow a patient to continue to use all of their Medicare benefits, in addition to the extra benefits provided by the extra policy.

It is also important to understand that a Medigap insurance plan is different from a Medicare Advantage Plan. A Medicare Advantage Plan is a way to receive Medicare benefits. A Medigap policy is a supplement to the Medicare benefits already in place.

Important Things to be Aware of Concerning Medigap Plans

  1. To qualify, you must have Medicare Part A and Part B.
  2. You can apply for a Medigap plan while still under a Medicare Advantage Plan. However, you must leave the Medicare Advantage Plan before the Medigap policy commences.
  3. You will pay a monthly premium for the Medigap policy, along with the monthly premium you pay for Medicare Part B.
  4. Medigap policies only cover one person. Each spouse will be required to have his or her own plan in place.
  5. Medigap plans can be purchased from any insurance company that is licensed in your state to sell them.
  6. Most Medigap policies are guaranteed to be renewable, even if you have additional health problems. As long as you continue to pay the premium, your policy cannot be cancelled.
  7. Medigap policies purchased after January 1, 2006 do not include prescription drug coverage. To receive this coverage, you must join a Medicare Prescription Drug Plan (Part D).
  8. If you already have a Medicare Medical Savings Account (MSA) Plan, it is illegal for any company to provide you with a Medigap policy.

It is also important to understand that Medigap policies do not generally cover everything. Most do not provide coverage for long-term care, vision, hearing aids, dental care, private-duty nursing, or eyeglasses.

Non-Medigap Plans
The following are not Medigap plans:

  • Veterans’ benefits
  • Medicare Advantage Plans (such as a PPO, HMO, or Private Fee-for-Service Plan)
  • Medicaid
  • Medicare Prescription Drug Plans
  • Employer or union plans, including the Federal Employees Health Benefits Program (FEHBP)
  • Insurance policies for long-term care
  • Indian Health Service, Tribal, and Urban Indian Health plans
  • TRICARE

Cancelling Your Medigap Policy
Some patients decide they want a different Medigap policy or that they want to use a Medicare Advantage Plan that provides prescription medication coverage instead. If, for whatever reason, you decide to drop your entire Medigap policy, be aware of the timing.

If you cancel your Medigap plan policy and the coverage was not creditable, or you go more than 63 days before your new Medicare plan starts, you will be required to pay a late enrollment fee for the Medicare Prescription Drug Plan, if you choose one.

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