What is Medigap? By definition, Medigap is private insurance that fill in the gaps between your Medicare benefits and what you must pay out of pocket. You purchase them from private insurance companies to help pay for things that Medicare does not pay for. This includes deductibles and copays that otherwise you would be responsible for.
Sometimes called a Medicare supplement, Medigap policies give you freedom to choose your own doctor. Once insured, you can never be dropped due to health reasons.
What Does Medigap Cover?
Medigap carriers offer 10 standardized insurance plans. They are each labeled with a letter of the alphabet. Each insurance plan has a different combination of benefits. (There is also one high deductible insurance plan.)
Some of the gaps that Medigap plans can cover for you are:
- Hospital deductibles, copays and an extra 365 days in the hospital
- The first 3 pints of blood as necessary in a transfusion
- Outpatient deductibles, coinsurance and excess charges
- Skilled Nursing coinsurance
- Foreign travel emergency care
To view the standardized plan options, view our Medicare supplement plans comparison chart here.
When Should I Enroll in Medigap?
The best time to apply for a Medicare supplement is during your open enrollment window. This window runs for six months from the effective date of your Medicare Part B, or when you turn 65, whichever is later. During this window, the insurance company cannot deny you coverage for any health reason, nor can they can raise their rates just on you due to any health conditions.
Some people choose to delay their enrollment into Medicare because they have other creditable coverage such as employer group health insurance. For these individuals, their 6-month Medigap open enrollment window will begin later one whenever they enroll in Part B, which is usually when they retire.
Choosing a Medigap Policy in 2019
There are dozens of insurance carriers offering Medigap plans in every state, so choosing a Medigap policy can sometimes feel overwhelming. It’s important to remember, though, that since plans are standardized, choosing a Medigap policy is all about choosing which Medigap plan letter that you want. A Plan G is a Plan G no matter which insurance company you buy that plan from. You must be enrolled in both Medicare Parts A and B and you must live in the state in which you buy your plan. Other than that, it really comes down to price and rate increase histories of the different insurance companies offering the plan you want.
So with that in mind, here are some things to keep in mind when choosing a Medigap policy.
- The 3 most popular plans in 2019 are Medigap Plan F, Plan G and Plan N
- Plan F has the most comprehensive coverage, but it is being phased out in Jan. 1, 2020 for new enrollees only
- Plan G has the next most comprehensive coverage
- Plan N has the lowest premiums of these 3 options, but you take on some copays for doctor and ER visits and excess charges of up to 15% for visits to any providers that do not accept Medicare assignment rates. (Some states do not allow excess charges.) If you visit the doctor frequently, those copays could add up, so in that scenario, Plan G may be a better choice
- Although you and your spouse will have separate policies, you may be able to qualify for household discounts. Be sure to ask us if you can qualify for any of these.
Don’t forget that Medigap policies also do not include Part D, so you will purchase your drug plan separately. Since this will be an additional expense, you’ll want to consider it when you are choosing a Medigap policy.
Common Questions about Medigap
What is Part F of Medicare?
It’s actually called Plan F, but people commonly confused the terms Parts and Plans. So what is Medigap Plan F? It is a Medigap plan that covers all of your deductibles and co-insurance. It provides what we call first-dollar coverage. You will not pull out your wallet for any covered expenses at doctor or hospital.
This plan has been very popular for decades because of the peace of mind it provides. You pay your premium and you know that no matter what health condition or injury or illness you develop, your medically necessary treatment will be covered 100%.
What is Medigap Plan G?
Plan G is a another Medicare supplement policy with very full coverage. It functions just like Plan F except you pay the Part B deductible each year. It often has lower premiums than Plan F, making it a great value for many beneficiaries.
What is the difference between Medigap Plan and G?
The only difference is that you pay the annual Part B deductible that we mentioned above. Otherwise, they work exactly the same.
How much is a Medigap Policy?
The cost of a Medigap policy depends on which plan letter you choose, and then varies by zip code, age, gender and tobacco use. Some carriers also offer household discounts if your spouse also has the same policy. We can provide quotes to find the cheapest Medigap Plan F in your area. Here at Boomer Benefits, we also like to look to see which company has the lowest rate and then also a history of low annual rate increases from that company as well.
Is Medigap and supplement insurance the same thing?
Yes. Medigap plans and Medicare supplements are the same thing. Just two different terms.
What is the average cost of supplemental insurance for Medicare?
The cost varies widely across the nation. Plans in Iowa and Indiana are very affordable while plans in Connecticut and Florida are much more expensive. Each insurance company sets their own rates based on the cost of healthcare in the area in which you live. As we mentioned above, several things can factor into your rates. Some companies also offer household discounts when two members at the same residence enroll in that company’s plans.
The best way to find out the rates for plans in your area is to contact Medigap insurance brokers like us for a free rate quote comparison.
How do I pick a Medigap plan?
You should start by getting quotes for the insurance companies in your area. Look for the most competitive rates for the plan letter that you want. Then compare the top five lowest priced carriers to see which one has had the lowest rate increases in recent years. Our agency can help you with a free comparison report.
Medicare also publishes a manual every year called Choosing a Medigap policy. This can be a great booklet to read as well.
What is the difference between Medigap and Medicare Advantage?
There are two primary ways that you can shore up your Original Medicare benefits. You can enroll in a Medigap plan which will pay after Medicare. This covers some or all of the gaps depending on the plan you choose. Your other option is a Part C Medicare Advantage plan. These plans are private insurance policies which pay instead of Medicare. When you enroll, you agree to use their network and pay copays for services as you go along.
It can be tricky to determine whether you should enroll in Medigap vs Medicare Advantage. Be sure to check out this post that compares these two types of coverage in more detail.
What is a Medigap Plan deductible?
Some Medigap plans help to pay for copays and coinsurance but leave the deductible for you to pay. For example, as we mentioned above, Plan G has a deductible of $185 (in 2019).
What is a Medigap plan copay?
Most Medigap plans cover your inpatient and outpatient copays under Medicare. However, on Medigap Plan N, the plan requires you to pay a copay of up to $20 for doctor visits and $50 for E.R. visits. These are copays that you will experience on that plan.
Tips about Medigap Plans
First, don’t confuse Medigap plans with Medicare Advantage plans. They are two completely different types of Medicare insurance plans. Most people don’t understand how differently these insurance policies function.
Get help from a licensed agent who can explain the two types of coverage. You need someone to help you be sure that you know exactly what you are enrolling in. Start with our article here about Medicare Supplements vs Medicare Advantage.
Another easy way to tell if a plan is a true Medicare supplement is that there will always be a monthly premium that you pay. There is no such thing as a $0 premium Medicare supplement. Also, Medicare supplement plans do not include drug coverage. People with Medicare supplements can buy affordable standalone Part D drug coverage for their prescription needs.
Medicare Supplements pay after Medicare so when you seek healthcare services, you will present both your Medicare card and your Medicare supplement card at the time of treatment. You can visit any healthcare provider who accepts Medicare, regardless of which Medicare Supplement insurance company you choose.
Get Someone on Your Side with Medicare
So if after this page you are still wondering…. What is Medigap… give us a call. Medicare terminology is confusing, but we can explain it in terms that are easier to understand.
If you would like to speak with a friendly, no-hassle agent who will break all of this down into plain English. Contact our agency today for help from a licensed insurance agent professional.