Updated 

What is Medigap? Breaking Down Coverage, Policies, and More

Written by 
Lacey Ramburger
Reviewed by 
Natalia Klusacek, APN
Article at a glance
  • Medigap (Medical Supplement Insurance) is meant to supplement Original Medicare.

  • Medigap and Medicare Advantage Plans offer different benefits and options.

  • A person cannot have both Medigap and a Medicare Advantage Plan

  • Medigap cannot be purchased without being enrolled in Original Medicare. 

Navigating the world of health insurance can leave a person overwhelmed with options to choose from. While many people may be familiar with Original Medicare, Medicaid services, or Medicare Advantage Plans, there are other options that can help a person lessen their out-of-pocket costs. One way to do this is by purchasing a Medigap policy to help with coverage gaps.

What is Medigap?

Medicare Supplement Insurance—also known as Medigap—helps cover insurance costs that Original Medicare doesn’t cover. Unlike the federal Medicare program, Medigap is offered by private health insurance companies.

After Medicare covers its agreed-upon costs, Medigap serves as additional coverage. Medigap helps to pay a Medicare-approved amount of leftover costs—including copayments, coinsurance, and deductibles. Additionally, Medigap can offer options that Original Medicare doesn’t, like medical services when you travel outside of the U.S.

There are currently 10 different Medigap plans: A, B, C, D, F, G, K, L, M, and N. However, some of these plans are no longer available to people newly enrolled in Medicare. 

Note: for more information about available Medigap plans, visit this source.

What Does Medigap Cover?

Covered health care costs with Medigap can include:

Copayments

These are fixed amounts a person pays for medical services after their deductible has been reached.

Coinsurance

The percentage of costs a patient pays for medical expenses.

Deductibles

The amount of money a person has to pay before their insurance starts helping to pay for medical care.

What Does Medigap Not Cover?

While Medigap does provide some benefits and coverage in some ways, there are particular medical services that it does not cover. 

These include:

  • Long-term Care

  • Vision Care/​Eyeglasses

  • Dental Care

  • Hearing Aids

  • Private Duty Nursing

Note: To gain these benefits, a person must add on a Medicare prescription drug plan (Part D) or opt to enroll in a Medicare Advantage Plan (Part C).

How Much Does Medigap Cost?

Medigap costs are separate from Medicare, despite that the plan works to supplement your existing Medicare. Additionally, different insurance companies have different ways of pricing (or rating”) their Medigap plans.

Community-rated

Also known as No Age Rated”, this plan has the same monthly premium and doesn’t change based on age.

Issue-age-rated

This premium is determined based on the age of the person enrolled. In this case, the younger a person is when they purchase a plan, the lower their premium cost will be.

Attained-age-rated

This premium is based on the current age of the person enrolled. As a person gets older, their premium increases over time.

With Medigap plans, there is a wide range in prices that vary from company to company—many providers charge vastly different rates for the same services, so it’s important to check with each plan about their premium costs and services before selecting one.

Important Medigap Policies

In addition to pricing and coverage, there are a few Medigap policies that must be followed in order to qualify for coverage.

  • A person must have Medicare Part A (Hospital Insurance) and B (Medical Insurance), also known as Original Medicare.

  • No one can simultaneously have a Medigap plan and a Medicare Advantage Plan.

  • Medicare doesn’t cover the costs of a Medigap plan—the beneficiary pays a premium to both Medicare and Medigap separately.

  • Medigap only covers one person. If multiple people in a household want Medigap coverage, they must apply individually to receive it.

  • If a person has a Medicare Advantage Plan, it is illegal for anyone to sell them a Medigap plan unless they are returning to Original Medicare.

Differences Between Medigap and Medicare Advantage

Medigap works in conjunction with Medicare and allows a person to be treated by any doctor or hospital in the US that accepts Medicare. Medicare Advantage plans have a specific network of providers for a person to choose from. If a person gets care from outside providers, it can cost more. 

Medigap is often a little more expensive than Medicare Advantage, but can still be cost-efficient depending on the situation. Medigap does not include Part D (prescription drug insurance), while Medicare Advantage Plans typically include a Part D option. It’s important to check with each plan to determine if they have available Medicare prescription drug plans.

Additionally, each option provides different benefits. Medigap plans tend to offer a wider network of flexibility in terms of doctors, providers, and hospitals—any doctor or hospital that accepts Medicare will also accept Medigap—though the premiums and other costs tend to be higher. With Medicare Advantage, a person can choose from a range of in-network providers at a lower cost to the person, but may not allow them to keep their same doctor or health care provider (there are plans that allow for outside providers, but they come at a higher cost).

Factors to Consider When Choosing a Plan

When trying to decide between choosing a Medigap plan or a Medicare Advantage Plan, there are factors that should be taken into consideration before making a final decision.

Costs:

Medigap can be more expensive but gives more options to choose from. Medicare Advantage Plans are less expensive, but costs can add up if a person goes outside the network of providers.

Choice of Doctors and Providers:

Medigap offers coverage for any doctor in the US (and even outside the country) that offers Medicare. Medicare Advantage Plans have a particular network of providers they offer, but a person can choose to select a provider outside the network if they choose a Preferred Provider Organization (PPO), though it can cost more to do so.

Benefits:

Both options provide different benefits that Original Medicare doesn’t. Medigap offers options for people who travel outside the US. Medicare Advantage Plans offers options like dental, vision, and hearing appointments, fitness memberships, and transportation to appointments, among others.

Note: To learn more about Medicare Advantage Services, visit this source.

Is it Possible to Switch Between Plans?

It is possible to switch between Medigap and Medicare Advantage Plans, and many do. Some choose to enroll in Medicare Advantage in the beginning and when healthier, and then switch to Medicare with Medigap when a person has increasing health issues. This can be risky though, as Medigap has the right to refuse a person based on age or health issues, and can opt to no longer offer the same (or any) coverage. It’s often recommended to start with Medigap because the initial enrollment period is the only time a person is guaranteed to be accepted into the program. If a person waits until later on, it can be difficult to get coverage, or a person can be charged more.

When to Enroll in Medigap?

There are a few potential windows open for a person to enroll in a Medigap Plan.

Initial Enrollment Period:

This takes place during the first 6 months a person is eligible, which starts the first month they are enrolled in Medicare Part B (Medical Insurance). During this time a person has a wider range of choices and prices to choose from when they decide to buy a Medigap policy.

Open Enrollment Period:

It’s possible to get a Medigap plan during open enrollment (October 15th-December 7th), companies can use certain stipulations to keep from selling a Medigap plan to a person, though there are exceptions.

Outside Open Enrollment Period

If a person applies for Medigap after the open enrollment period has ended, there is no guarantee that an insurance company will sell them a plan. There are exceptions that can potentially give a better chance of a person obtaining Medigap coverage outside of their initial or open enrollment period.

Note: To check about exceptions and Medigap coverage, visit this source.

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