Medigap
Medigap, also called Medicare Supplement Insurance, is health insurance coverage provided by private companies designed to pay for costs not covered by Original Medicare. A Medigap policy covers coinsurance only after you've paid the deductible (unless the Medigap policy also pays the deductible). Monthly premiums for a Medigap policy are paid to a private insurance company that is licensed to sell such policies in your state and are in addition to the monthly premium for Medicare Part B. Medigap, also called Medicare Supplement Insurance, is health insurance coverage provided by private companies designed to pay for costs not covered by Original Medicare. However, if you have Medicare Advantage and are unhappy with the plan, you can switch to Original Medicare within the first 12 months, at which point you can buy Medigap coverage. You can buy Medigap insurance from a private insurance company to pay for costs not covered by Original Medicare.
What Is Medigap Insurance?
Medigap, also called Medicare Supplement Insurance, is health insurance coverage provided by private companies designed to pay for costs not covered by Original Medicare. Depending on which plan you get, these costs might include copayments, coinsurance, and deductibles, as well as services Original Medicare doesn't cover, such as travel outside of the U.S.
Understanding Medigap Insurance
Original Medicare — defined as Parts A and B — will not cover all expenses associated with an illness. Medigap policies are designed to cover all or a portion of those extra charges, depending on the type of coverage, but generally don’t include long-term care, vision, dental care, hearing aids, eyeglasses, or private nursing.
Although private insurance companies offer Medigap coverage, the federal government requires companies to offer standardized policies. Your 12 choices are plans A, B, C, D, F, F-High Deductible, G, G-High Deductible, K, L, M, and N.
However, for those who become newly eligible for Medicare in 2020 and after, plans C, F, and F-High Deductible are no longer available. That’s because these plans cover the Medicare Part B deductible, the amount you have to pay before coverage kicks in, which is $203 in 2021.
Congress passed the Medicare Access and CHIP Reauthorization Act (MACRA) in 2015, which disallowed such coverage. The intention was to make people pay at least a little bit for health care to prevent them from running straight to the doctor for every scrape, scratch, or sniffle. Fortunately, those who are already enrolled in plans C, F, and F-High Deductible will be able to keep them going forward. In addition, people eligible for Medigap before Jan. 1, 2020, who did not enroll in a plan may still be able to buy them.
A Medigap policy covers coinsurance only after you've paid the deductible (unless the Medigap policy also pays the deductible).
Requirements for Medigap Coverage
Monthly premiums for a Medigap policy are paid to a private insurance company that is licensed to sell such policies in your state and are in addition to the monthly premium for Medicare Part B. A policy only covers one person. So, if you and your spouse want coverage, you each need a separate Medigap policy.
Furthermore, according to Medicare.gov,
“The best time to buy a Medigap policy is during your six-month Medigap open enrollment period.... During that time you can buy any Medigap policy sold in your state, even if you have health problems. This period automatically starts the month you’re 65 and enrolled in Medicare Part B (Medical Insurance).... After this enrollment period, you may not be able to buy a Medigap policy. If you’re able to buy one, it may cost more due to past or present health problems."
Shopping for Medigap coverage is straightforward because you merely compare prices and the suitability of the insurance company. Once you have a Medigap policy, it is guaranteed renewable, even if you have health problems. In other words, the insurance company cannot cancel the policy so long as the premiums are paid.
Medigap coverage does not work with a Medicare Advantage Plan (Part C). Indeed, if you have a Medicare Advantage Plan, it is illegal for someone to sell you Medigap coverage. However, if you have Medicare Advantage and are unhappy with the plan, you can switch to Original Medicare within the first 12 months, at which point you can buy Medigap coverage.
CARES Act of 2020
Related terms:
Coinsurance
Coinsurance is the claim amount an insured must pay after meeting deductibles and is also the level at which an owner must protect property. read more
Copay
A copay is a fixed amount paid by an insured for covered services. Insurance providers often charge co-pays for services such as doctor visits or prescription drugs. read more
Creditable Coverage
Creditable coverage is a health insurance, prescription drug, or another health benefit plan that meets a minimum set of qualifications. read more
Medicaid
Medicaid is a government-sponsored insurance program for individuals and families whose income is insufficient to cover health related services. read more
Medicare Advantage
Medicare Advantage, or Medicare Part C, is a type of hospital and medical insurance provided by private companies instead of the federal government. read more
Medicare Hold Harmless Provision
The Medicare hold harmless provision keeps Social Security benefits from decreasing year over year due to hikes in Medicare Part B premiums. read more
Medicare Part B Premiums
Medicare Part B premiums are a monthly fee for medical insurance to cover services not covered in Medicare Part A. read more
Medicare Part A
Medicare Part A, or Medicare hospital coverage, is one of the four parts of Medicare, the government’s health insurance program for older adults. read more
Medicare Star-Rating System
The Medicare Star-Rating System measures how well Medicare Advantage and Medicare Part D plans perform. Find out how the Star Rating System works. read more
Medicare Supplement Insurance
Medicare supplement insurance, also known as Medigap, is private insurance sold to complement original Medicare coverage. read more