Medigap Plans: What You Need to Know
If you’re new to Medicare, you’ll no doubt find that the system is often confusing. Let’s talk about something that can add to your confusion: Medigap.
What is a Medigap Plan?
Medigap insurance is designed to supplement regular Medicare, filling often expensive gaps not covered by Medicare.
- Regular Medicare (Parts A, B and D) can have sizable bills incurred that aren’t covered by Medicare.
- To fill in these non-covered areas, you can enroll in a Medicare Advantage plan or get a Medigap plan. If you have one, you cannot have the other at the same time.
- Medigap only supplements Medicare and is not a stand-alone policy. Your doctor must take Medicare patients; if your physician doesn’t, Medigap won’t pay for your procedure.
- Although Medicare standardizes Medigap coverage, Medigap is only offered by private insurers.
- The cost of Medigap is based on the age you are when you first purchased it. The younger you are when you purchase, the less you’ll have to pay. If you wait until you’re older, you’ll pay higher premiums based on your age.
- Many Medigap insurance providers offer other extra coverage such as hearing aids, which aren’t paid for through regular Medicare.
Medigap Plans Explained
As with Medicare plans, Medigap plans are named with letters: A, B, C, D, F, G, K, L, M and N.
Medigap is only available to you if you already gave Medicare Part A, which helps pay for hospital charges and Medicare Part B, which covers doctor services.
The Medigap Blog on the State Health Insurance Assistance Programs (SHIP) web site provides useful information about changes in 2020. The blog notes that as of January 1, 2020, Plan C and Plan F, which cover the Part B Medicare deductible, became unavailable to individuals turning 65 on or after January 1. Those who already have Plan C or Plan F can keep it.
How Medigap Policies are Standardized
Every Medigap policy is required to follow federal and state laws and must be identified as “Medicare Supplement Insurance.” Premium costs, however, vary per plan.
Insurance companies that choose to offer Medigap plans can decide which policies to offer. Any insurance provider that sells Medigap policies:
- Isn’t required to offer every Medigap plan
- Must offer Medigap Plan A, Plan C or Plan F if they sell any Medigap policies
- Must provide same core benefits
- Can also offer additional benefits, such as vision care through add-ons.
What Medigap Does Not Cover
Although Medigap covers many gaps in regular Medicare, it does not typically cover the following:
- Medicare co-payments and deductibles
- Long-term care
- Private-duty nursing care
- Dental care
- Vision care and eyeglasses
- Hearing aids
- Prescription drugs, usually (though some do)
Medigap Coverage Outside the U.S.
Some Medigap plans include additional coverage options for health care services and supplies if you need them while outside the country.
Emergency coverage while traveling covers by Medigap Plans C, D, F, G, M and N for the first 60 days of your trip, unless you already have travel coverage through Medicare.
When you need certain medically necessary emergency care abroad, Medigap will pay 80 percent of billed expenses after you have met a $250 deductible. There is a lifetime limit of $50,000.
Finding the Medigap Plan That is Right for You
Medigap plans differ in a variety of ways. The government provides the following chart with side-by-side comparisons.
|Medigap Benefits||Medigap Plans|
|Part A coinsurance and hospital costs up to an additional 365 days after Medicare benefits are used up||Yes||Yes||Yes||Yes||Yes||Yes||Yes||Yes||Yes||Yes|
|Part B coinsurance or copayment||Yes||Yes||Yes||Yes||Yes||Yes||50%||75%||Yes||Yes***|
|Blood (first 3 pints)||Yes||Yes||Yes||Yes||Yes||Yes||50%||75%||Yes||Yes|
|Part A hospice care coinsurance or copayment||Yes||Yes||Yes||Yes||Yes||Yes||50%||75%||Yes||Yes|
|Skilled nursing facility care coinsurance||No||No||Yes||Yes||Yes||Yes||50%||75%||Yes||Yes|
|Part A deductible||No||Yes||Yes||Yes||Yes||Yes||50%||75%||50%||Yes|
|Part B deductible||No||No||Yes||No||Yes||No||No||No||No||No|
|Part B Excess charge||No||No||No||No||Yes||Yes||No||No||No||No|
|Foreign travel exchange (up to plan limits)||No||No||80%||80%||80%||80%||No||No||80%||80%|
|Out-of-pocket limit in 2020**||N/A||N/A||N/A||N/A||N/A||N/A||$5,880||$2,940||N/A||N/A|
* Plans F and G also offer a high-deductible plan in some states. With this option, you must pay for Medicare-covered costs (coinsurance, copayments, and deductibles) up to the deductible amount of $2,340 in 2020 before your policy pays anything. (Plans C and F aren’t available to people who are newly eligible for Medicare on or after January 1, 2020.)
** For Plans K and L, after you meet your out-of-pocket yearly limit and your yearly Part B deductible ($198 in 2020), 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 inpatient admission.
Best Time to Enroll in a Medigap Plan
The optimum time to sign up for Medigap is when you initially enroll in Medicare.
In the first seven months of Medicare enrollment (Initial Enrollment Period, or IEP), Medigap policies are not allowed to deny coverage or charge more for a pre-existing condition. But, if you decide down the road to get Medigap coverage, you can face some consequences.
After the IEP, insurance companies selling Medigap coverage are allowed to:
- Deny you coverage because of pre-existing conditions; or
- Charge you more based on your health
States vary on the particulars of how this works, so check your state for the details.
Medigap Open Enrollment Period
Open enrollment period for Medigap is six months from the first day of the month in which you turned 65 or within six months of signing up for Medicare Part B. Once your enrolled, you will also pay monthly premiums to the insurance company providing the Medigap plan.
Compare Medigap Policies
As you do with any insurance, you need to shop for the plan that is right for you before buying Medigap coverage. Medicare.gov discusses how to compare Medigap plans. A quick way to receive quotes to compare is on the EINSURANCE quote tool under Medicare Supplemental Plans. Learn more and use an interactive map to find state-specific insurance guidelines.