Ever wondered “what is medigap?” – Original Medicare doesn’t always cover all of your healthcare costs. Medicare Part A and Part B do offer substantial benefits to qualified patients over age 65 or those with disabilities. However, there are often coverage gaps, high monthly premiums, and both co-payments and co-insurance that take additional money out of your pocket.

Medicare supplemental insurance can help to fill some of those coverage gaps. That is why this insurance is commonly called Medigap. In a nutshell, the term Medigap refers to private health insurance plans sold by third-party health insurance providers that are designed to compliment the United States federal government’s existing Medicare plans.

Medigap plans generally provide coverage assistance for a number of services. These include the co-payments and co-insurance costs stemming from:

  • hospital
  • ambulance
  • nursing facility
  • durable medical equipment (DME)
  • home health care
  • physician services

It is important to note that Medigap may not cover all of your out-of-pocket expenses. Think of it as a backup for Medicare Part A (hospital insurance) and Medicare Part B (medical insurance). Medigap does not provide assistance with costs stemming from Medicare Part C (Medicare Advantage) plans, Medicare Part D (prescription drug) plans, Medicaid, Veterans’ Administration benefits, TRICARE, or private health insurance.

Medigap plans

Even though Medigap plans are sold and administered by private health insurance companies, the federal government maintains oversight. This is to ensure that each plan compliments Original Medicare. There are 10 standardized plans to choose from. Each one provides coverage proportional to a required monthly premium.

Though the plan coverage offerings are mostly uniform, pricing varies based on the company selling the plan, the state of residence for the purchasing patient, and various other factors. If you live in rural Nebraska, for example, you’ll likely pay lower premiums than someone who lives in Los Angeles, California. Some states, such as Massachusetts, Minnesota, and Wisconsin, even require Medigap sellers to provide additional coverage over and above the federally mandated plan standards, which can of course affect the pricing.

Medigap currently offers Plan A, B, C, D, F, G, K, L, M, and N options. See our plan-specific articles for additional information about each coverage option, and be sure to shop around with your local insurance providers to obtain the best price for your coverage needs.

Medigap does not provide help with prescription drug coverage. Some Medigap policies sold prior to 2006 may have prescription drug coverage, but Medicare eliminated those options on new Medigap policies when it introduced the Medicare Part D plan.

Am I eligible and what does it cost?

You are eligible for Medigap plans as long as you are already enrolled in Original Medicare Part A or Part B. The Medigap open enrollment period begins on the first day of the month you turn 65 and lasts for six months. During this time frame, you may purchase any Medigap plan regardless of any preexisting health conditions. Medigap providers can not deny you coverage, charge you higher prices because of your health problems, or delay the start of your coverage. If you miss the six month open enrollment window, however, you will likely be subject to medical underwriting by the insurance company that is providing your choice of Medigap plan. If that happens, it may increase the plan’s monthly premium costs.

Note that if you elect to enroll in a Medicare Advantage Plan (also known as Medicare Part C), Medigap providers are not allowed to sell you a Medigap policy.

Insurance companies set Medigap monthly premium fees in three basic ways. Community-rated premiums are the same for all applicants. Issue-age-rated premiums are computed based on your age when you buy the policy. Generally you pay less if you enroll sooner. Attainted-age-rated premiums are based on your current age. This means that the monthly fee increases as you get older.

The official Medigap website lists the national average costs of each supplement plan. Costs range from $45 per month for Plan K to $118 per month for Plan C.