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Medicare Supplement Insurance, also known as Medigap, is a specialized form of supplemental insurance for Medicare Part A and Part B. Offered by private providers, it was designed to fill gaps of cost exposure in Original Medicare benefits.
Instead of a Medicare Supplement, some people choose Medicare Advantage plans because of their low premiums. Our Medicare Plan Comparison Tool allows you to search for Medicare Advantage plans in your area based on your preferences.
Medigap plans help consumers pay costs that would otherwise be out of pocket, such as:
Regarding the mechanics of the Medigap insurance system, the following items are essential:
An insurance company can only purchase Medigap policies with a license to sell in the state.
Insurance companies that sell Medicare supplemental policies are required by law to provide a precise mix of plans, and certain states have their own standards.
Medigap Plans are offered in unique types, designated by letter such as Plans A, G, F, or N.
Of course, these Medigap Plans are not to be confused with Original Medicare Parts A, B, C (Medicare Advantage) or D.
Each standardized Medigap policy must offer the same basic benefits regardless of the insurance company who sells it.
Therefore, the only difference between Medigap policies of the same type is the premium cost charged by the carrier.
Officially, federal law does not require insurance companies to sell Medigap policies to people under 65, with exceptions only in a few states.
In any case, a person purchasing a Medigap policy must also be signed up for Original Medicare Parts A and B.
Before enrolling, first determine what your current health needs are and future health needs may be. This essential step involves consideration of your personal and family health history. Importantly so, as you may not be able to switch policies later.
Then, determine which Medigap plan meets those needs and find out which insurance carriers offer Medigap policies where you live.
Universally, Medigap designates each type of plan by a letter, A through N. Among these, each type has specific standardization to cover the exact services and items.
Therefore, comparing Medigap insurance companies boils down to premium price when looking at policies of the same type.
On the whole, prices vary widely and from year to year. They differ especially by type of Medigap policy as well as the age or health of the buyer.
Location is a driver of premium costs as well. Some services have much higher prices in particular geographic areas.
Other factors that affect premium prices include inflation, and specific medical expenses.
For the lowest price and guarantee of issuance, the best time to buy takes place during the 7-month Initial Enrollment Period that surrounds a person’s 65th birthday.
There are a large number of restrictions on Medigap coverage. Each state sets rules and must authorize the issuance of any given type of policy.
Once again, consumers must remain insured by Medicare A and B to get or keep Medigap coverage.
Medigap policies do not cover certain services:
Medigap policies can be compared with several ways to get the information that best reflects a buyer’s situation.
Price at the time of purchase comprises a first-level comparison. By any of the rating methods, the initial cost imparts a good test of value.
The rate of premium increases is the next level; for example, those rating types based on age might go up faster than others. Premium increase rates can also be determined on a community level, or can even be locked-in at the time of purchase.
Cost increases would be the third level, but other than those based on age alone. The Medigap carrier makes assessments based on actual healthcare costs, and prices premiums accordingly.
On this level of comparison, research into the insurance companies that offer these plans can provide useful tips.
One can learn about past rate hikes and how quickly those increases came over time. Gaining a sense of consumer satisfaction can prove a helpful compass in choosing a plan.
Medigap benefits cover a wide range of situations. They focus on gaps in Medicare A and B coverage for medically necessary services.
Medicare Supplement plans must provide coverage for the basic benefits listed below:
Other Medigap plans also offered can partially or fully pay for:
