medigap – medicare supplement insurance

insurance coverage that fills the gaps in medicare's plans

Because Original Medicare covers a significant portion of its recipients' health care expenses, eligibility for Medicare is a welcome milestone. But for all that Medicare covers, its enrollees learn quickly that Original Medicare doesn't pick up the tab for everything.

Enrollees still find that they need help with many Medicare expenses – including copayments, coinsurance and deductibles.

And that's just the beginning. The list of expenses Medicare won't cover includes medical expenses incurred during travel outside the United States and its territories.

To cover those expenses, millions purchase Medicare supplement insurance – or Medigap.

where can you buy medigap coverage?

Medigap policies are available in any state, and all Medigap insurers must abide by strict state and federal laws. In most states, carriers are obliged by law to offer a standardized Medigap policy that is identified by the letters "A" through "N." (Medigap policies in Wisconsin, Minnesota, and Massachusetts are standardized in a slightly different way.)

In some states, not all types of Medigap coverage will be available. In other states, you may be able to purchase Medicare SELECT – a Medigap policy that requires plan holders to use specific hospitals and, in some cases, specific doctors.

It's important to note that insurance companies offering Medigap policies are not required to offer every Medigap policy. However, if a carrier offers any Medigap policy, it is required to also offer at least Medigap Plan A, Plan C or Plan F. In addition, each carrier's Medigap policy must offer the same basic benefits as any policy with the same letter offered by another carrier.

are there gaps in medigap coverage?

Yes. The list of expenses that Medigap policies don't cover includes long-term care in a nursing home, vision and dental care, hearing aids, eyeglasses, and private-duty nursing care.

Also, Medigap policies aren't compatible with the following types of coverage: employer or union plans; veterans' benefits; Indian health services; Medicare Advantage plans; Medicare prescription drug plans; and Medicaid. Finally, Medigap policies are for individuals only – not for couples or families.

how do medigap insurers set their prices?

The cost of a Medigap policy can vary with each insurance company. There are three ways in which insurers set Medigap rates:

• With community-rated pricing, enrollees are charged the same premium regardless of age. For example, if you buy a policy at age 65, you'll pay $165 monthly for as long as you keep the policy.
• Issue-age-rated premiums are based on the age of the purchaser. So the older the person is at the time of purchase, the higher the premium.
• With attained-age-rated pricing, the premium goes up as the insured person ages. Clearly, it's important to get in on the ground floor – during the six months following your 65th birthday.

how can I pay less for medigap coverage?

Take the time to find Medigap policies that offer discounts. Some insurers offer discounts for women, non-smokers, married people, and for paying annually. Many states also offer a health insurance assistance program, providing up-to-date Medigap insurance information and a list of qualified private insurers. If your state does not have an assistance program, click here.

is there a best time to purchase a medigap policy?

The best window of time in which to buy a Medigap policy begins on the first day of the month in which both the purchaser and his/her spouse have reached the age of 65 and both have enrolled in Medicare Part B. The Medigap enrollment period lasts for six months. Some states do offer enrollment periods for those under 65, so it pays to research your state's health care regulations.

The timing is pivotal for the purchaser of a Medigap policy, because buying a policy after your enrollment period gives your carrier the option of denying the application based on the company's underwriting requirements.

will I have to wait for my medigap policy to take effect?

An insurer can't make you wait for your coverage to start, but it can make you wait for coverage of a pre-existing condition – and may also refuse to cover your out-of-pocket costs for that pre-existing condition for up to six months during a pre-existing condition waiting period." That said, if you recently had "credible coverage" – or if you have guaranteed issue "Medigap protection" – you may be able to shorten or avoid entirely the waiting period.

For more information about Medigap, read Choosing a Medigap Policy: A Guide to Health Insurance for People with Medicare.