Choosing A Medigap Policy

A Guide To Health Insurance For Those On Medicare

Medigap Basics

A Medigap policy is private health insurance that helps supplement Original Medicare. This means it helps pay some of the health care costs that Original Medicare doesn’t cover (like copayments, coinsurance, and deductibles). These are “gaps” in Medicare coverage.

If you have Original Medicare and a Medigap policy, Medicare will pay its share of the Medicare-approved amounts for covered health care costs. Then your Medigap policy pays its share. A Medigap policy is different from a Medicare Advantage Plan (like an HMO or PPO) because those plans are ways to get Medicare benefits, while a Medigap policy only supplements the costs of your Original Medicare benefits.

Note: Medicare doesn’t pay any of your costs for a Medigap policy.

All Medigap policies must follow federal and state laws designed to protect you, and policies must be clearly identified as “Medicare Supplement Insurance.” Medigap insurance companies in most states can only sell you a “standardized” Medigap policy identified by letters A through N. Each standardized Medigap policy must offer the same basic benefits, no matter which insurance company sells it.

Cost is usually the only difference between Medigap policies with the same letter sold by different insurance companies.

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In Massachusetts, Minnesota, and Wisconsin, Medigap policies are standardized in a different way. In some states, you may be able to buy another type of Medigap policy called Medicare SELECT. Medicare SELECT plans are standardized plans that may require you to see certain providers and may cost less than other plans.

* Plan F is also offered as a high-deductible plan by some insurance companies in some states. If you choose this option, this means you must pay for Medicare-covered costs (coinsurance, copayments, deductibles) up to the deductible amount of $2,200 in 2017 before your policy pays anything.

**For Plans K and L, after you meet your out-of-pocket yearly limit and your yearly Part B deductible ($183 in 2017), the Medigap plan pays 100% of covered services for the rest of the calendar year.

*** Plan N pays 100% of the Part B coinsurance, except for a copayment of up to $20 for some office visits and up to a $50 copayment for emergency room visits that don’t result in an inpatient admission.

What do I need to know if I want to buy a Medigap policy?

You must have Medicare Part A (Hospital Insurance) and Medicare Part B (Medical Insurance) to buy a Medigap policy.

If you have a Medicare Advantage Plan (like an HMO or PPO) but are planning to return to Original Medicare, you can apply for a Medigap policy before your coverage ends. The Medigap insurer can sell it to you as long as you’re leaving the Plan. Ask that the new Medigap policy start when your Medicare Advantage Plan enrollment ends, so you’ll have continuous coverage.

You pay the private insurance company a premium for your Medigap policy in addition to the monthly Part B premium you pay to Medicare.

A Medigap policy only covers one person. If you and your spouse both want Medigap coverage, you each will have to buy separate Medigap policies.

When you have your Medigap Open Enrollment Period, you can buy a Medigap policy from any insurance company that’s licensed in your state.

If you want to drop your Medigap policy, write your insurance company to cancel the policy and confirm it’s cancelled. Your agent can’t cancel the policy for you.

Any standardized Medigap policy is guaranteed renewable even if you have health problems. This means the insurance company can’t cancel your Medigap policy as long as you stay enrolled and pay the premium.

Different insurance companies may charge different premiums for the same exact policy. As you shop for a policy, be sure you’re comparing the same policy (for example, compare Plan A from one company with Plan A from another company).

Some states may have laws that may give you additional protections.

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