Medicare Supplement Insurance, also known as Medigap insurance, is one way to help cover the costs that Medicare doesn’t pay, such as deductibles, copayments, and coinsurance. Medigap got its name because it fills in some of the gaps of Original Medicare.
Medigap works as secondary insurance to Original Medicare. Medicare pays its share of the approved amount for a service, then the Medigap policy pays its portion of the remaining charge. Medicare Supplement insurance (or MediGap) is sold by private companies.
There are 10 standardized Medigap plans available (unless you live in Massachusetts, Wisconsin, or Minnesota), plans A, B, C, D, F G, K, L, M and N. Each plan covers the same benefits with the main differences being how they are priced by private companies and when the rates increase. It pays to shop for the best rate.
As with Medicare, there is no network or referrals needed, if a physician or facility, accepts Medicare they will accept your Medigap plan.
Medigap plans do not include prescription drug coverage, you will need to purchase a stand-alone prescription plan.
Medigap plans typically do not provide coverage for routine vision, routine hearing or routine dental, nor long term care. Medicare only covers medically necessary items. If Medicare doesn’t pay, usually your Medigap policy won’t pay either.
Open Enrollment for Medigap insurance starts the month you turn 65 and last for 6 months. During this time frame you can’t be turned down for a Medigap policy.
If you are past the open enrollment window you will be medically underwritten for a Medigap insurance policy. You can be turned down, charged higher rates and/or you may have a pre-existing condition limitation for a Medigap policy. Some states have guarantee issue rules. Our seasoned agents can help answer questions about your state.
If you are under 65 and disabled, some states have guarantee issued rules for Medigap open enrollment.
Medigap premium rates:
Medigap policies can rate their policies one of three ways.
- Community rating – everyone in a particular area pays the same rate.
- Issue rating – your rate is based upon at what age you purchase it, the early you purchase the lower the rate
Attained age rating – rate is based upon current age and increases as you age.