Medicare Part A and Part B, although quite encompassing, have out-of-pocket costs that you still have to pay for — that is if you don’t have the right Medicare Supplement Insurance plan.
Medigap is a Medicare Supplement Insurance that helps fill “gaps” in Original Medicare and is sold by private companies. Original Medicare pays for much, but not all, of the cost of covered health care services and supplies. A Medicare Supplement Insurance (Medigap) policy can help pay some of the remaining health care costs, such as:
Medicare Supplement Features
- Help fills in the gaps associated with “original” Medicare
- See any doctor who accepts Medicare patients
- No referrals are needed to see a specialist.
- Nationwide coverage
- Coverage remains in force for life as long as premiums are paid
Medigap vs. Medicare Advantage
The primary difference between the Medigap and Medicare Advantage plans come at a different cost. Generally speaking, Medigap plans have higher premiums than Medicare Advantage plans. However, Medicare Advantage plans often cover fewer expenses than Medigap — potentially resulting in more out-of-pocket expenses.
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Every Medigap policy must follow federal and state laws designed to protect you, and it must be clearly identified as “Medicare Supplement Insurance.” Insurance companies can sell you only a “standardized” policy identified in most states by letters. All policies offer the same basic benefits but some offer additional benefits, so you can choose which one meets your needs.
There are 10 Different Medicare Supplement Insurance plans that are denoted by Plans A through N. Each Medicare Supplement insurance plan offers a different level of coverage, but each lettered plan must include the same standardized basic benefits regardless of insurance company and location. Medicare Supplement insurance plans do not have to cover vision, dental, long-term care, or hearing aids, but all plans must cover at least a portion of the following basic benefits:
* 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$2,490 in 2022 before your policy pays anything. (Plans C and F aren’t available to people who were 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, 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.
Medicare Supplement Insurance Plan (Medigap) Costs
Why is it so important to shop for your Medicare Supplement Insurance? Although the plans are standardized, insurance companies can charge different premiums for the exact same Medigap plan and coverage tier. That is why shopping for a policy is so important. There are also different ways carriers calculate premiums now and going forward.
- Community no-age-rated: Premiums are the same across the board regardless of age.
- Issue-age-rated: These plans base their premiums on your age when you first enrolled in the policy and remain the same.
- Attained-age-rated: Premium is based on the age you were when you first bought a policy and increases as you get older.
- Please note that no matter what rating method an insurance company uses, premiums may increase over time for reasons other than age, such as inflation.
Medicare Supplement Insurance Plan Enrollment and Eligibility
The best time to enroll in a Medigap policy is during your 6-month Medigap Open Enrollment Period. This begins when you start the month you turn age 65 AND enroll in Part B. To be eligible for a Medigap plan you must be enrolled in parts A & B.
If you chose to enroll at this time, you have a guaranteed-issue right to join any Medicare Supplement insurance without having to answer any medical questions and you may not be denied based on pre-existing medical conditions****.
If you miss this enrollment period and attempt to enroll in the future, you may be denied basic benefits or charged a higher premium based on your medical history.