Medicare Supplement (Medigap)

Summary:

  • Medicare Supplement insurance (also known as Medigap) is offered by private insurance companies to help supplement some of the healthcare costs not covered by Original Medicare (Part A and B).
  • There are different levels of coverage in the Medigap plans. They all have of some standard level of care coverage. It's important to shop around for a plan that is right for you and your needs.
  • Prices vary greatly from one company to the next. You should compare the same plan at different companies to get the best cost.
  • You can apply directly through a private Medigap provider, or speak to a Retirement Health Planners Independent Sales Representative.

What is Medicare Supplement (Medigap)?

Medicare Supplement, or Medigap policies, help fill in the gap of what Original Medicare (Part A and Part B) does not cover. This can be copays, deductibles, and co-insurance. It is meant to 'supplement' the Original Medicare. Medicare Supplement Insurance is sold by private insurance companies and requires a monthly premium. Some plans may provide coverage for other services that Part A and Part B do not cover, like care received when you travel outside of the U.S. You must have Medicare Part A and Part B to get a Medigap policy.

Additional things to note about Medicare Supplement insurance plans:

  • A range of services and plans, each assigned a letter from “A” to “N.” It’s important to note plans “E”, “H”, “I” and “J” are no longer sold.
  • Basic Medigap coverage is the same across most states and insurance companies. You can buy a Medigap policy from any insurance company that's licensed in your state to sell one.
  • Each Medigap plan follows federal and state laws to protect you and your policy.
  • Costs can vary greatly, so it is important to compare Medigap policies.
  • Any standardized Medigap policy is guaranteed renewable even if health problems arise. This means the insurance company can't cancel your Medigap policy as long as you pay the premium. In some states, insurance companies may refuse to renew a Medigap policy bought before 1992.
  • Some Medigap policies sold in the past covered prescription drugs. But, Medigap policies sold after January 1, 2006 aren't allowed to include prescription drug coverage. If you want prescription drug coverage, you can purchase a Medicare Prescription Drug Plan (Part D).
  • It's illegal for anyone to sell you a Medigap policy if you have a Medicare Advantage Plan, unless you're switching back to Original Medicare.
  • If you want to switch to Original Medicare and buy a Medigap policy, contact your Medicare Advantage Plan to see if you're able to disenroll.
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Insurance plans that aren't Medigap

Some types of insurance are not Medigap plans, they include:

  • Medicare Advantage Plans (like an HMO, PPO, or Private Fee-for-Service Plan)
  • Medicare Prescription Drug Plans
  • Medicaid
  • Employer or union plans, including the Federal Employees Health Benefits Program (FEHBP)
  • Tricare
  • Veterans' benefits
  • Long-term care insurance policies
  • Indian Health Service, Tribal, and Urban Indian Health plans

Medigap policies can't work with Medicare Advantage Plans. If you have a Medigap policy and join a Medicare Advantage Plan (Part C), you may want to drop your Medigap policy. Your Medigap policy can't be used to pay your Medicare Advantage Plan copayments, deductibles, and premiums.

What does Medicare Supplement Cover?

Medicare Supplement plans cover some costs not covered by Original Medicare. For example, a 20% co-insurance bill for a doctor visit may be covered with a Medigap plan. All Medicare Supplemental insurance plans cover some standard services. If there are additional benefits you are interested in, you should shop the different plans available.

All Medicare Supplemental insurance plans cover:

  • Medicare Part A coinsurance and hospital fees
  • Medicare Part A hospice coinsurance or copayment costs
  • Medicare Part B coinsurance or copayment costs
  • Blood transfusion costs, up to the first 3 pints

Other services covered depending on the plan:

  • Skilled nursing facility care co-insurance
  • Part A deductible
  • Part B deductible (no longer covered for new Medicare beneficiaries)
  • Part B excess charges
  • Emergency care cost during foreign travel

Medicare Supplement plans generally don’t cover:

  • Prescription drugs
  • Vision
  • Dental
  • Long-term care
  • Hearing aids

Medicare Supplement plans cover some costs not covered by Original Medicare. For example, a 20% co-insurance bill for a doctor visit may be covered with a Medigap plan.

Compare Medigap Plans

Plans available to all Medigap applicants Medicare-eligible before 2020
Basic Benefits: A B D G* K L M N C F*
Part A: Hospital coinsurance (plus costs up to an additional 365 days after Medicare benefits end) X X X X X X X X X X
Part A: Hospice care coinsurance or copay X X X X 50% 75% X X X X
Part B: Coinsurance or copay X X X X 50% 75% X X*** X X
Medicare preventative care Part B coinsurance X X X X X X X X X X
Parts A & B: Blood (first 3 pints) X X X X 50% 75% X X X X
Additional Benefits: A B D G* K L M N C F*
Skilled nursing facility care coinsurance X X 50% 75% X X X X
Part A deductible: $1,484 X X X 50% 75% 50% X X X
Part B deductible: $203 X X
Part B excess charges X X
Foreign travel emergency (lifetime limit of $50,000) 80% 80% 80% 80% 80% 80%
Out-of-pocket yearly limit** $6,220 $3,110

*Plans F and G offer a high-deductible plan. You pay for Medicare-covered costs up to the deductible amount ($2,370 in 2021) before your plan pays anything.
**After you meet your out-of-pocket yearly limit and Part B deductible, the plan pays 100% of covered services for the rest of the calendar year.
***Plan N pays 100% of the Part B coinsurance except up to $20 copays for some office visits and up to $50 copays for emergency room visits (if the hospital admits you, the plan waives your emergency room copays).

What do I do if I'm unsure Medicare Supplement will cover what I need?

Because different Medigap plans cover different things, it is best to check with the specific insurance carrier for details on your exact plan.

In most Medigap policies, the Medigap insurance company will get your Part B claim information directly from Medicare. Then, they pay the doctor directly. Some Medigap insurance companies also provide this service for Part A claims.

If your Medigap insurance company doesn't provide this service, ask your doctors if they "participate" in Medicare. This means that they "accept assignment" for all Medicare patients. If your doctor participates, the Medigap insurance company is required to pay the doctor directly if you request it.

What does it cost?

Medicare does not pay any of the costs for you to get a Medigap policy. You have to pay your own premiums for a Medigap policy.

Medigap costs will vary greatly by plan and insurance company. Insurance companies may charge different premiums for the exact same 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.

Medigap policies can be priced or "rated" in 3 ways:

Community-rated (also called "no age-rated")

  • How it’s priced: Generally the same monthly premium is charged to everyone who has the Medigap policy, regardless of age.
  • What this pricing may mean for you: Your premium isn’t based on your age. Premiums may go up because of inflation and other factors, but not because of your age.
  • Example: Mr. Abbott is 65. He buys a Medigap policy and pays a $165 monthly premium.
  • Mrs. Smith is 72. She buys the same Medigap policy as Mr. Abbott. She also pays a $165 monthly premium because, with this type of Medigap policy, everyone pays the same price regardless of age.

Issue-age-rated (also called 'entry age-rated")

  • How it’s priced: The premium is based on the age you are when you buy (when you're "issued") the Medigap policy.
  • What this pricing may mean for you: Premiums are lower for people who buy at a younger age and won’t change as you get older. Premiums may go up because of inflation and other factors, but not because of your age.
  • Example:
    • Mr. Brown is 65. He buys a Medigap policy and pays a $145 monthly premium.
    • Mrs. Cartwright is 72. She buys the same Medigap policy as Mr. Brown. Since she’s older when she buys it, her monthly premium is $175.

Attained-age-rated

  • How it’s priced: The premium is based on your current age (the age you have "attained"), so your premium goes up as you get older.
  • What this pricing may mean for you: Premiums are low for younger buyers, but go up as you get older. They may be the least expensive at first, but they can eventually become the most expensive. Premiums may also go up because of inflation and other factors.
  • Example:
    • Mrs. Daniels is 65. She buys a Medigap policy and pays a $120 monthly premium. Her premium will go up each year.
      • At 66, her premium goes up to $126.
      • At 67, her premium goes up to $132.
      • At 72, her premium goes up to $165.
    • Mr. Franklin is 72. He buys the same Medigap policy as Mrs. Daniels. He pays a $165 monthly premium. His premium is higher than Mrs. Daniel's because it’s based on his current age. Mr. Franklin's premium will go up every year.
      • At 73, his premium goes up to $171.
      • At 74, his premium goes up to $177.
Couple Researching Medicare

Other things that affect the cost of a Medigap policy

  • Discounts available (examples: women, non-smokers, or people who are married; discounts for paying yearly; discounts for paying your premiums using electronic funds transfer; or discounts for multiple policies).
  • The use of medical underwriting, or if a company applies a different premium when you don’t have a guaranteed issue right (also called “Medigap protections”), or if you are not in a Medigap Open Enrollment Period.
  • If the company sells Medicare Select policies that require you to use certain providers. If you buy this type of Medigap policy, your premium may be less.
  • There are “high-deductible options” for Plans F or G. If you buy Plans F or G with a high-deductible option, you must pay the first $2,340 of deductibles, copayments, and coinsurance not paid by Medicare before the Medigap policy pays anything. You must also pay a separate deductible ($250 per year) for foreign travel emergency services.
  • If you bought your Medigap Plan J before January 1, 2006, and it still covers prescription drugs, you would also pay a separate deductible ($250 per year) for prescription drugs covered by the Medigap policy. And, if you have a Plan J with a high deductible option, you must pay the first $2,340 before the policy pays anything.

Once you are 65 or older and enrolled in Medicare Part A and Medicare Part B, you can get a Medicare Supplement insurance policy.

How do I enroll in Medicare Supplement?

The best time to buy a Medigap policy is during your 6-month Medigap Open Enrollment Period. You generally will get better prices and more choices among policies. During that time you can buy any Medigap policy sold in your state, even if you have health problems. This period automatically starts the first month you have Medicare Part B (Medical Insurance) and you're 65 or older. It can't be changed or repeated. After this enrollment period, you may not be able to purchase a Medigap policy. If you're able to buy one, it may cost more due to past or present health problems.

During open enrollment 

A large benefit of applying for Medigap insurance during your open enrollment is that you are not subject to medical underwriting. Medigap insurance companies are generally allowed to use medical underwriting to decide whether to accept your application and dictate the price of the policy. However, even if you have health problems, during your Medigap open enrollment period you can buy any policy the company sells for the same price as people with good health.

When is my open enrollment period?
  • If you are 65 or older
    • Your enrollment period begins when you enroll in Medicare Part B.
  • If you are turning 65
    • The best time to buy is the 6-month period that starts the first day of the month you're 65 or older and enrolled in Part B. For example, if you turn 65 and are enrolled in Part B in July, the best time for you to buy a Medigap policy is from July to December.
    • After this enrollment period, your option to buy a Medigap policy may be limited and it may cost more. Some states have additional open enrollment periods.
  • If you are under 65
    • If you're under 65, you may not be able to purchase the Medigap policy you want, or any Medigap policy, until you turn 65. However, some states require Medigap insurance companies to sell you a Medigap policy, even if you're under 65. If you're able to buy one, it may cost you more.
  • If you have group health coverage through an employer or union
    • If the coverage is due to you or your spouse currently working, you may want to wait to enroll in Part B. Employer plans often provide coverage similar to Medigap, so you don't need a Medigap policy.
    • When your employer coverage ends, you'll get a chance to enroll in Part B without a late enrollment penalty. That means your Medigap open enrollment period will start when you're ready to take advantage of it. If you enrolled in Part B while you still had the employer coverage, your Medigap open enrollment period would start. Unless you bought a Medigap policy before you needed it, you’d miss your open enrollment period entirely.

Outside open enrollment

If you apply for Medigap coverage outside of your open enrollment period, there's no guarantee that an insurance company will sell you a Medigap policy if you don’t meet the medical underwriting requirements, unless you're eligible due to one of the below situations.

There are some exceptions in that certain states may allow you to purchase another type of Medigap policy called Medicare Select. If you buy a Medicare SELECT policy, you have the right to change your mind within 12 months and switch to a standard Medigap policy.

What are examples of times outside of my Open Enrollment?
  • If you are under 65 and eligible for Medicare because of a disability or End-Stage Renal Disease (ESRD).
    • A Medigap policy isn't available to people with ESRD under 65.
    • If you are under 65, you may not be able to buy the Medigap policy you want, or any Medigap policy, until you turn 65. There are some states that require insurance companies offer at least one kind of Medigap policy to people under the age of 65:
      • AR, CA, CO, CT, DE, FL, GA, HI, ID, IL, KS, KY, LA, MA, MD, ME, MI, MN, MO, MS, MT, NC, NH, NJ, NY, OK, OR, PA, SD, TN, TX, VT, WI
      • Some states provide these rights to all people with Medicare under 65. Other states provide these rights only to people eligible for Medicare because of disability or only to people with ESRD. Check with your State Insurance Department about what rights you might have under state law.
  • If you have health problems.
    • During the Medigap open enrollment period, an insurance company can't use medical underwriting.
    • If you wait until outside of your open enrollment period, you may still be able to obtain a policy:
      • If you have a guaranteed issue right
      • Even with health underwriting you may still qualify for a Medigap policy, but it is also possible that the insurance company could deny you a policy based on your health.
  • If you have a pre-existing condition.
    • The insurance company may still offer you a policy, but it may be able to make you wait for coverage of any pre-existing condition(s).
    • In some cases, the Medigap insurance company can refuse to cover your out-of-pocket costs for these pre-existing health problems for up to 6 months (called the "pre-existing condition waiting period"). After these 6 months, the Medigap policy will cover your pre-existing condition. Coverage for the pre-existing condition can be excluded if the condition was treated or diagnosed within 6 months before the coverage starts under the Medigap policy. After this 6-month period, the Medigap policy will cover the condition that was excluded.
    • When you get Medicare-covered services, Original Medicare will still cover the condition, even if the Medigap policy won't cover your out-of-pocket costs, but you're responsible for the coinsurance or copayment.
  • If you have a pre-existing condition and you are replacing "creditable coverage."
    • Creditable Coverage is previous health insurance coverage that can be used to shorten a pre-existing condition waiting period under a Medigap policy.
    • It's possible to avoid or shorten waiting periods for a pre-existing condition if you buy a Medigap policy during your Medigap open enrollment period to replace "creditable coverage (medigap)."
    • If you have had at least 6 months of continuous prior creditable coverage, the Medigap insurance company can't make you wait before it covers your pre-existing condition. Many types of health care coverage can count as creditable coverage for Medigap policies, but they’ll only count if your break in coverage was no more than 63 days.
  • If you have other insurance.
    • If you have group health insurance through an employer or union, your Medigap open enrollment period will start when you sign up for Part B.
  • If you have a guaranteed issue right.
    • If you buy a Medigap policy when you have a guaranteed issue right (also called "Medigap protections"), the insurance company can't use a pre-existing condition waiting period.

10 Illegal Medigap Practices to Watch For

You should call 1-800-633-4227 if you feel a federal law was broken. Times you should call the Inspector General's hotline are if someone tries to:

  1. Pressure you to buy a Medigap policy or lie to get you to switch to a new company or policy.
  2. Sell you a second Medigap policy when they know you already have one. (They can sell you a policy if you state, in writing, that you plan to cancel your existing policy.)
  3. Sell you a Medigap policy if they know you have Medicaid, except in certain situations.
  4. Sell you a Medigap policy if they know you're in a Medicare Advantage (MA) Plan. (They can sell you a policy if your MA plan coverage will end before the Medigap policy's effective date.)
  5. Claim that a Medigap policy is part of the Medicare program or any other federal program. Medigap is private health insurance.
  6. Claim that a Medicare Advantage Plan is a Medigap policy.
  7. Sell you a Medigap policy that can't legally be sold in your state. Check with your State Insurance Department to make sure the policy you're interested in can be sold in your state.
  8. Misuse the names, letters, or symbols of these:
  9. Claim to be a Medicare representative if they work for a Medigap insurance company.
  10. Sell you a Medicare Advantage Plan when you say you want to keep Original Medicare and buy a Medigap policy. A Medicare Advantage Plan isn't the same as Original Medicare. If you enroll in a Medicare Advantage Plan, you'll be disenrolled from Original Medicare and can't use a Medigap policy.
Medicare supplement insurance plans are not connected with or endorsed by the U.S. government or the federal Medicare program. This is a solicitation of insurance.  A licensed agent/producer may contact you.  Medicare Supplement insurance is available to those age 65 and older enrolled in Medicare Parts A and B and, in some states, to those under age 65 eligible for Medicare due to disability or End-Stage Renal disease.  MasterCare America, Inc. and Insuractive LLC are licensed and certified representatives of Medicare Advantage HMO, HMO SNP, PPO, PPO SNP and PFFS organizations and stand-alone PDP prescription drug plans. Each of the organizations they represent has a Medicare contract. Enrollment in any plan depends on contract renewal. The plans they represent do not discriminate on the basis of race, color, national origin, age, disability, or sex.  For a complete list of available plans please contact 1-800-MEDICARE (TTY users should call 1-877-486-2048), 24 hours a day/7 days a week or consult www.medicare.gov

Recommended Reading

Original Medicare

Original Medicare is made up of two parts: Medicare Part A and Medicare Part B.

Medicare Part D

Medicare Part D is for prescription drug coverage. You can enroll separately or combine it with Original Medicare (Part A and Part B).

Medicare Part C

Medicare Part C, or Medicare Advantage, combines Medicare Part A and Part B, and most plans include Part D that may offer extra benefits not covered by Original Medicare.