What is Medigap or Medicare Supplement Insurance?
One of the choices for health insurance in addition to Medicare Part A and Part B is a Medicare Supplement policy, often known as Medigap. Every Medigap policy is governed by federal and state laws and is offered through private insurance companies. The plans are labeled A-N with varying coverages and costs.
Where am I covered with Medigap?
Medigap policies offer nationwide coverage and, in many cases, worldwide coverage. Many people who are turning 65 or retiring and want to travel choose a Medigap plan. You can generally go to any hospital, any doctor, anywhere in the United States that accepts Medicare.
Medigap Costs
If you enroll in a Medigap policy, Medicare pays its share of the Medicare-approved amount which is 80%. The Medigap policy pays its share, 20%, and you pay a monthly premium to the insurance company.
The cost of a Medigap policy can differ greatly from one company to another, while offering the exact same plan. Also, the companies can increase their rates year over year. It is important to shop for your coverage carefully.
When To Enroll In A Medicare Supplement Policy
The best time to enroll in a Medigap policy is during your Medigap Open Enrollment Period, which is the six-month period that begins on the first day of the month in which you turn 65 or older and have enrolled in Part B. (Some states have additional Open Enrollment Periods.) After this enrollment period you may not be able to buy a Medigap policy without answering health questions.
Once you have your plan in place, as long as you pay your premiums you are generally “guaranteed renewable” for as long as you have your policy. This means your health insurance company cannot cancel your policy due to health problems. If you leave the plan voluntarily, it may be difficult to re-enroll at a later date without health questions.
Note: It is important to know that if you are retiring and no longer working but covered under an employer’s insurance you will need to sign up for Medicare Part B to avoid penalty. Learn more about Medicare and retirement.
What about Medigap and Drug Coverage?
Medigap policies do not have Part D drug coverage included. You will need to enroll in a Part D Prescription Drug Plan (also known as a PDP) separately and within your Initial Enrollment Period to avoid a penalty.