Medicare offers beneficiaries a wide variety of benefits, but it doesn’t pay for everything. If you manage a chronic condition (or more than one) or visit multiple doctors regularly, those costs add up quickly. That’s where Medicare Supplement Insurance comes in.

Commonly known as Medigap, this is a private insurance policy that helps cover some of the costs that Medicare doesn’t. Typically, this means co-payments, co-insurance, and deductibles. With a Medigap policy, Medicare pays its share of Medicare-approved healthcare costs and then your supplemental insurance pays its share. If any amount remains, you are responsible for those costs.

Medigap Explained

Medigap policies are offered through private insurance companies and are available to anyone aged 65 or over who has Original Medicare (Parts A and B). You may apply for Medigap if you have a Medicare Advantage (MA) Plan. However, you must leave your MA plan before your supplemental policy begins.

With Medigap, you have a monthly premium in addition to your Part B premium, paid directly to the private insurer that sold you the plan.

Important things to remember about Medigap

• Medigap policies cover one person, which means your spouse (if you have one) must buy his or her own policy.
• The insurance company you choose must be licensed in your state to sell Medigap policies.
• As long as you pay your premium, your insurance company cannot cancel your Medigap policy, even if you become ill.
• Medigap policies sold after January 1, 2006 may not include prescription drug coverage. You must join a Medicare Prescription Drug Plan for this coverage.
• If you have a Medicare Savings Account plan, it is illegal for any insurer to sell you a Medigap policy.
• Medigap policies don’t cover everything. They typically exclude vision care, long-term care, dental care, eyeglasses, hearing aids, and private nursing.

When Is the Best Time to Buy a Medigap Policy?

It cannot be overstated that the best time to purchase a Medigap policy is during the first six months you have Medicare Part B (also known as your Medigap open enrollment period). During this time, your application does not have to undergo medical underwriting. This means that, even if you have health problems, you can buy any Medigap policy for the same price as someone with good health.

Do not confuse this with your Initial Enrollment Period, which begins three months before the month of your 65th birthday. With Medigap, you are only guaranteed acceptance once you are both 65 AND enrolled in Medicare Part B.

For example, if you turn 65 in February and immediately enroll in Part B, your Medigap open enrollment period lasts through July. But, if you turn 65 in February but do not enroll until June, you have through December of that same year to apply for a Medigap policy without going through the medical underwriting process.

If you apply for a policy outside of the Medigap open enrollment period, the insurer uses medical underwriting to determine how much to charge you and whether they’ll even accept your application. If you are accepted, you may pay more for your premium.

What Does a Medigap Policy Cover?

The same way MA plans must offer the same coverages as Original Medicare, your Medigap policy must be standardized and meet federal and state guidelines. As of 2019, Medigap policies are standardized differently in three states: Massachusetts, Minnesota, and Wisconsin.

There are 10 different Medigap plans and the insurance companies decide which plans to offer. They do not have to offer all 10 but they must offer Medigap Plan A plus either Plan C or Plan F.

Typically, Medigap policies only cover co-insurance after you meet your yearly deductible. However, if you choose a plan that pays the deductible, this does not apply.

Comparing Medigap Plans

Listing off each item covered and at what rate can be confusing, so we offer this table, originally provided by Medicare.gov. This allows you to quickly see which benefits each plan includes for easy comparison.

Yes indicates that the plan covers 100 percent of the benefit. No indicates that it does not cover the benefit. The % indicates what percentage of the benefit the plan covers. N/A indicates not applicable.

Final Thoughts on Medigap Plans

Medicare Supplement Insurance helps pay the costs not covered by Original Medicare, but you are only guaranteed one of these policies if you apply during your Medigap open enrollment period. This period lasts for the first six months that you have Plan B and are aged 65. If you wait to apply after that period, you may be denied based on health reasons or charged a higher premium based on medical underwriting. Look carefully at your plan options – what they cover and what the premiums cost – to determine which plan best meets your needs.