When it comes to supplemental coverage for Medicare, it is important to do your homework before making a coverage decision. Because Medicare does not cover all healthcare costs, you might need a Medicare Supplement Insurance.
What is Medicare Supplemental Insurance (Medigap)?
A Medicare Supplement Insurance policy (also known as Medigap) helps pay some of the health care costs that Original Medicare doesn’t cover, like:
Medigap policies are sold by private companies.
Some Medigap policies also cover services that Original Medicare doesn’t cover, like medical care when you travel outside the U.S. If you have Original Medicare and you buy a Medigap policy, here’s what happens:
A Medigap policy is different from a Medicare Advantage Plan. Those plans are ways to get Medicare benefits, while a Medigap policy only supplements your Original Medicare benefits.
You pay the private insurance company a monthly premium for your Medigap policy. You pay this monthly premium in addition to the monthly Part B premium that you pay to Medicare.
A Medigap policy only covers one person. If you and your spouse both want Medigap coverage, you’ll each have to buy separate policies.
You can buy a Medigap policy from any insurance company that’s licensed in your state to sell one.
Any standardized Medigap policy is guaranteed renewable even if you have health problems. This means the insurance company can’t cancel your Medigap policy as long as you pay the premium.
Some Medigap policies sold in the past cover 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 join 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.
Medigap policies don’t cover everything
Medigap policies generally don’t cover long-term care, vision or dental care, hearing aids, eyeglasses, or private-duty nursing.
Insurance plans that aren’t Medigap
Some types of insurance aren’t Medigap plans, they include:
Medicare Advantage Plans (like an HMO, PPO, or Private Fee-for-Service Plan)
Indian Health Service, Tribal, and Urban Indian Health plans
Dropping your entire Medigap policy (not just the drug coverage)
You may want a completely different Medigap policy (not just your old Medigap policy without the prescription drug coverage). Or, you might decide to switch to a Medicare Advantage Plan that offers prescription drug coverage.
If you decide to drop your entire Medigap policy, you need to be careful about the timing. When you join a new Medicare drug plan, you pay a late enrollment penalty if one of these applies:
CMR & Associates provides independent retirement and insurance advice by reviewing your current plans to improve coverage and reduce cost. Through our proprietary database – The CMR Database® (comprised of some 13,000 brokers and specialists globally) – we maximize access to the retirement and insurance industry for greater options that will translate to better coverage and lower cost. Since 1999, we have saved clients over $120 million.
Please email CMR Associates or call 877-447-4301 or 212-447-4300 for more information.