Medigap is extra health insurance that you buy from a private company to pay health care costs not covered by Original Medicare, such as co-payments, deductibles, and health care if you travel outside the U.S. Medigap policies don't cover long-term care, dental care, vision care, hearing aids, eyeglasses, and private-duty nursing. Most plans do not cover prescription drugs.
You pay a monthly premium for a Medigap policy. A Medigap policy covers only one person. If you and your spouse both want a Medigap policy you will each need to buy one.
Medigap policies are only available to people who already have Medicare Part A, which helps pay for hospital services, and Medicare Part B, which covers the cost for doctor services. People who have a Medicare Advantage plan cannot get a Medigap plan.
To learn about Medigap plans offered in your area, you can use the online Medicare Plan Finder or contact your state's department of insurance.
Standard Medigap plans are labeled A through N and offer different levels of health coverage. Plans C, E, F, H, I, and J are no longer available to new subscribers.
Premiums vary among insurance companies, but the benefits of each standard Medigap plan are always the same. For instance, a Medigap Plan C policy offers set benefits no matter which company you buy it from. However, standard Medigap policies are different in Massachusetts, Minnesota, and Wisconsin.
If you are going to buy a Medigap plan, the open enrollment period is six months from the first day of the month of your 65th birthday -- as long as you are also signed up for Medicare Part B -- or within six months of signing up for Medicare Part B. During this time, you can buy any Medigap policy at the same price a person in good health pays. If you try to buy a Medigap policy outside this window, there is no guarantee that you'll be able to get coverage. If you do get covered, your rates might be higher.
For a Medigap plan, you pay a monthly premium to the insurance company in addition to your Medicare Part B premium. The cost of your Medigap policy depends on the type of plan you buy, the insurance company, your location, and your age. A standardized Medigap policy is guaranteed renewable -- even if you have health problems -- if you pay your premiums on time.
However, you may have to wait up to six months for coverage if you have a pre-existing health condition. The insurer through which you buy your Medigap policy can refuse to cover out-of-pocket costs for pre-existing conditions during that period. After six months, the Medigap policy must cover the pre-existing condition. The exception to this rule is if you buy a Medigap policy during your open enrollment period and have had continuous "creditable coverage," or a health insurance policy for the six months before buying a Medigap policy. The Medigap insurance company cannot withhold coverage for a pre-existing condition in that case.
Insurance companies set their own prices and rules about eligibility, so it's important to shop around.
Most Medigap plans help pay for many of your Medicare co-payments, co-insurance for hospital stays, and some other services.
Less expensive plans have fewer benefits and higher out-of-pocket costs. More expensive plans include extra benefits, like some Medicare deductibles, additional hospital benefits, at-home recovery, and more. You have to decide what sort of plan makes the most sense for you. If you drop your Medigap policy, there is no guarantee you will be able to get it back.
Some Medigap plans used to cover prescription drugs. Since the introduction of the Medicare Prescription Drug Plan (Part D), you can no longer sign up for these plans. If you already have a Medigap plan that covers prescriptions, however, you can keep it.
For more information about Medigap plans, see the Medicare web site at www.medicare.gov or call 800-MEDICARE (1-800-633-4227). For help in choosing a Medigap plan, visit your local State Health Insurance Assistance Program (also called SHIPs). SHIPs offer free, unbiased advice on Medicare.