Summary: Private insurance companies offer health insurance to cover a variety of out-of-pocket expenses not covered by Original Medicare, Part A and Part B, called Medicare Supplement Insurance plans, also called Medigap.
Medigap insurance, may help you pay for the “gap” between what Original Medicare pays and what you pay out of your own pocket. You can apply for Medicare Supplement Insurance plans through private insurance companies.
What are Medicare Supplement Insurance plans?
- Medicare Supplement Insurance plans sold today don’t cover prescriptions. But you can sign up for a stand-alone Medicare Part D prescription drug plan.
- In most states, there are 10 standardized Medigap plans to choose from.
- Medicare Supplement Insurance plans are labeled A, B, C, D, F, G, K, L, M, and N (Plans E, H, I, and J are no longer available).
- In Massachusetts, Minnesota and Wisconsin, Medigap policies are standardized in a different way.
The table below shows a summary of benefits offered by each of the 10 standardized Medicare Supplement Insurance plans. In this chart, X means that the service (or item) is 100% covered; a percentage indicates what percent of the service/item is covered; and a blank cell means it is not covered.
*Plans F and G 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 $2370 in 2021 before your policy pays anything. Plans C and Plan F will not be available to new beneficiaries aging on or after January 1, 2020. However, if you already have Plan C or Plan F, you can keep it.
**Once you reach the out-of-pocket limits (including the Part B deductible), both Medicare Supplement Insurance Plans K and L pay 100% of covered services in the above chart for the remainder of the calendar year.
***Plan N pays 100% of the Part B coinsurance costs, except up to $20 copayment for some office visits and up to $50 copayment for emergency room visits that don’t result in inpatient admission.
Tip: All insurance companies selling a particular Medicare Supplement Insurance plan type in your area must offer the same basic benefits in that plan type, but may offer it at different prices. So, you may want to shop for the best price.
Because Medicare Supplement Insurance plans are regulated by state and federal laws, the basic benefits offered by plans of the same letter type are generally the same regardless of insurer.
- The differences will be in the price and who administers the plan.
- Each insurer may not offer all types of Medicare Supplement Insurance plans in your area.
- Choose a health insurer you trust, and shop around for the best prices.
In some states, you may be able to buy another type of Medigap policy called Medicare SELECT, which may require you to use a specific network of doctors and hospitals.
How do I get a Medicare Supplement Insurance plan?
You can buy a Medicare Supplement insurance plan only if you already have Original Medicare, Part A and Part B. You can buy Medicare Supplement Insurance plans from private insurance companies.
Tip: Medicare supplement insurance plans work beside Original Medicare to fill in cost gaps.
If you are considering a Medicare Advantage plan, be aware that you can’t use a Medicare Supplement Insurance plan with a Medicare Advantage plan.
When can I get a Medicare Supplement Insurance plan?
Your Medicare Supplement Open Enrollment Period (OEP) begins the first day of the month in which you are at least 65 and you first have Medicare Part A and Part B. You have six months to buy a Medicare Supplement insurance plan when the company is required to sell it to you. If you wait until after your Medigap OEP, you can apply anytime you want, but a plan could reject you or charge you more if you have health problems.
There may be other times after your Medigap OEP when you have “guaranteed-issue rights” to a Medicare Supplement Insurance plan.
For example, say you sign up for a Medicare Advantage plan. (Medicare Supplement Insurance plans don’t work with Medicare Advantage plans.)
- Suppose you decide to drop the Medicare Advantage plan and return to Original Medicare.
- Suppose it has been a year or less since you signed up for the Medicare Advantage plan.
- You have a right to buy a Medicare Supplement (Medigap) insurance plan.
- Your “guaranteed issue rights” to a Medigap plan only apply to certain plans.
Medicare Supplement coverage of pre-existing conditions
As long as you buy a Medicare Supplement Insurance plan during the six-month Medicare Supplement Open Enrollment Period, the insurance company cannot refuse to sell you a plan. The insurance company also can’t charge you more because you have health problems or make you wait for basic benefits to begin.
However, you may have to wait up to six months for the Medicare Supplement policy’s benefits to include your pre-existing condition*.
If you apply for a Medicare Supplement insurance plan outside of your Medicare Supplement Open Enrollment Period, the private insurance company may “underwrite” the plan.
Underwriting the plan means that you may be subject to a physical exam, and the insurance company can refuse to sell you the plan or they can adjust your premium based on your health status.
How insurance companies set Medigap premiums
There are three ways that an insurance company can set Medigap premium rates for Medicare Supplement Insurance plans:
- “Community-rated” (or “no-age-rated”) premiums are the same for everyone, regardless of age.
- “Issue-age-rated” (or “entry-age-rated”) premiums are based on your age when you first buy the policy. The sooner you buy, the less you will pay.
- “Attained-age-rated” premiums are based on your current age, meaning it goes up as you grow older.
Other factors impacting the premium rates of Medicare Supplement Insurance plans can include inflation, geography, medical underwriting (if you did not buy a plan when first eligible), and other discounts.
You should check with each specific health insurer to see how it sets Medigap prices before you buy.
*Pre-existing conditions are generally health conditions that existed before the start of a policy. They may limit coverage, be excluded from coverage, or even prevent you from being approved for a policy; however, the exact definition and relevant limitations or exclusions of coverage will vary with each plan, so check a specific plan’s official plan documents to understand how that plan handles pre-existing conditions.
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