Medigap (Medicare Supplement Insurance)
The Original Medicare Plan pays for many health care services and supplies, but there are many costs it doesn’t cover. To help cover extra health care costs, you might want to buy a Medigap policy.
Note: Medicare doesn’t pay any of the costs for a Medigap policy.
What is a Medigap policy?
A Medigap policy is health insurance sold by private insurance companies to fill “gaps” in Original Medicare Plan coverage. Medigap policies help pay your share (coinsurance, copayments, or deductibles) of the costs of Medicare-covered services, and some policies cover certain costs not covered by the Original Medicare Plan. If you are in the Original Medicare Plan and have a Medigap policy, then Medicare and your Medigap policy will both pay their shares of covered health care costs. Insurance companies can only
sell you a “standardized” Medigap policy. These Medigap policies must all have specific benefits. Generally, when you buy a Medigap policy you must have Medicare Part A and Part B. You or someone on your behalf
(like a former employer or union) will have to pay the monthly Medicare Part B premium. You will also have to pay a premium to the Medigap insurance company. In most states, you may be able to choose from up to 12 different standardized Medigap policies (Medigap Plans A through L). Medigap policies must follow Federal and state laws. A Medigap policy only works with the Original Medicare Plan. Medigap policies generally provide some of the same kinds of supplemental coverage as Medicare Advantage Plans. If you join a Medicare Advantage Plan (like an HMO or PPO), your Medigap policy won’t pay any deductibles, copayments, or other cost-sharing that may apply under your Medicare Advantage Plan. Therefore, you may want to drop your Medigap policy if you join a Medicare Advantage Plan. You
have a legal right to keep the Medigap policy, but you will have to continue to pay premiums, and you may get little or no benefit. However, if you aren’t sure you will stay in the Medicare Advantage Plan and you cancel your Medigap policy, you might not be able to get the same policy back, or in some cases, any policy, if you leave the Medicare Advantage Plan. Your rights to buy a Medigap policy may vary by state.
Medigap Policies and Medicare Prescription Drug Coverage Although some Medigap policies sold in the past covered prescription drugs, no new Medigap policies covering prescription drugs are being sold. To cover prescription drug costs, you may want to buy Medicare prescription drug coverage (Part D) offered by private companies approved by Medicare. If you join a Medicare Prescription Drug Plan, and you have a
Medigap policy that covers drugs, you must tell your Medigap insurer to remove the prescription drug coverage from your Medigap policy.