When you first sign up for Medicare, it’s easy to feel overwhelmed by all the options. One of the most important decisions you'll face is whether to get additional coverage through a Medigap policy. Medigap, also known as Medicare Supplement Insurance, is designed to help cover some of the costs that Original Medicare doesn’t, such as copayments, coinsurance, and deductibles.
What Is Medigap?
Medigap policies are sold by private insurance companies and can only be purchased if you have Original Medicare (Parts A and B). These policies fill in the “gaps” left by Original Medicare, typically 20% of what Medicare does not cover. This is why they’re often referred to as “supplemental” insurance.
Medigap policies can help reduce your out-of-pocket expenses and provide more predictable healthcare costs, which can be a huge relief when managing a fixed income.
Why Might You Need Medigap?
While Medicare Part A covers hospital stays and Part B covers doctor visits, they don’t cover everything. For example, you might still have to pay a percentage of the cost for a hospital stay or an outpatient procedure. These expenses can add up, especially if you have a serious health condition or require frequent medical care.
This is where Medigap comes in. By covering some or all of these additional costs, Medigap policies can help protect your savings from unexpected medical bills. Depending on the plan you choose, Medigap may cover part of some services like foreign travel emergency care or even skilled nursing facility care. Learn more about what Medigap covers.
How Do Medigap Plans Work?
Medigap plans are standardized and labeled with letters ranging from A to N. Each lettered plan offers a different level of coverage, but all policies with the same letter provide the same benefits, regardless of which insurance company sells them. For example, Plan G from one company will have the same coverage as Plan G from another, although the premiums may vary.
It’s important to note that Medigap policies do not cover prescription drugs. For that, you’ll need a separate Medicare Part D plan. Learn more about how Medigap works.
When Should You Buy a Medigap Policy?
The best time to purchase a Medigap policy is during your Medigap Open Enrollment Period, which begins the first month you are 65 and enrolled in Medicare Part B. During this six-month period, you have a guaranteed right to buy any Medigap policy sold in your state, regardless of your health status. If you miss this window, you might not be able to purchase a policy or could be charged higher premiums due to pre-existing conditions. Compare different Medigap plan benefits at Medicare.gov.
What Are the Costs Involved?
The cost of Medigap policies varies depending on the plan you choose, your location, and the insurance company. Generally, the more coverage a plan offers, the higher the premium. It’s important to shop around and compare prices from different insurers to find a plan that fits your needs and budget. Learn more about Medigap costs.
Can You Change Medigap Plans?
Yes, you can change your Medigap plan at any time, but switching plans might be difficult if you're outside your Medigap Open Enrollment Period unless you have a guaranteed issue right. Outside of your Guaranteed issue right or Initial Enrollment Period (IEP), you may have to undergo underwriting to qualify for Medigap/Supplement plans. Some states have additional rules that might allow you to switch plans more easily, so it's a good idea to check the regulations in your state.
Choosing the right Medigap policy can make a significant difference in how much you pay out of pocket for healthcare.
It’s essential to evaluate your healthcare needs, compare different plans, and consider your financial situation before making a decision. With the right Medigap policy, you can enjoy greater peace of mind and more predictable healthcare expenses.
Understanding Medigap is a key part of making the most of your Medicare coverage. If you’re ready to dive deeper, join one of our Medicare classes on GetSetUp to explore your options and ensure you’re making the best decision for your healthcare needs.