Medigap is Medicare Supplement Insurance that helps fill "gaps" in Original Medicare and is sold by private companies. Original Medicare pays for much, but not all, of the cost for covered health care services and supplies. A Medicare Supplement Insurance (Medigap) policy can help pay some of the remaining health care costs, like:
Some Medicare Supplement/Medigap policies may also cover services that Original Medicare does not cover, like medical care when you travel outside the U.S. If you have Original Medicare and you buy a Medicare Supplement/Medigap policy, here is what happens:
- Medicare will pay its share of the Medicare-approved amount for covered health care costs.
- Then, your Medicare Supplement/Medigap policy pays its share.
Medigap policies do not cover everything
Medigap policies generally do not cover long-term care, vision or dental care, hearing aids, eyeglasses, or private-duty nursing.
Insurance plans that are not Medigap
Some types of insurance are not Medigap plans, they include:
- Medicare Advantage Plans (like an HMO, PPO, or Private Fee-for-Service Plan)
- Medicare Prescription Drug Plans
- Employer or union plans, including the Federal Employees Health Benefits Program (FEHBP)
- Veterans' benefits
- Long-term care insurance policies
- Indian Health Service, Tribal, and Urban Indian Health plans
Dropping your entire Medigap policy (not just the drug coverage)
You may want a completely different Medigap policy (not just your old Medigap policy without the prescription drug coverage). Or you might decide to switch to a Medicare Advantage Plan that offers prescription drug coverage.
If you decide to drop your entire Medigap policy, you need to be careful about the timing. When you join a new Medicare drug plan, you pay a late enrollment penalty if one of these applies:
- You drop your entire Medigap policy and the drug coverage was not creditable prescription drug coverage
- You go 63 days or more in a row before your new Medicare drug coverage begins
8 things to know about Medigap/Medicare Supplement policies
- You must have Medicare Part A and Part B.
- A Medicare Supplement/Medigap policy is different from a Medicare Advantage Plan. Those plans are ways to get Medicare benefits, while a Medicare Supplement/Medigap policy only supplements your Original Medicare benefits.
- You pay the private insurance company a monthly premium for your Medicare Supplement/Medigap policy. You pay this monthly premium in addition to the monthly Part B premium that you pay to Medicare.
- A Medicare Supplement/Medigap policy only covers one person. If you and your spouse both want Medicare Supplement/Medigap coverage, you will each have to buy separate policies.
- You can buy a Medicare Supplement/Medigap policy from any insurance company that is licensed in your state to sell one.
- Any standardized Medicare Supplement/Medigap policy is guaranteed renewable even if you have health problems. This means the insurance company cannot cancel your Medicare Supplement/Medigap policy as long as you pay the premium.
- Some Medicare Supplement/Medigap policies sold in the past cover prescription drugs. But Medicare Supplement/Medigap policies sold after January 1, 2006 are not allowed to include prescription drug coverage. If you want prescription drug coverage, you can join a Medicare Prescription Drug Plan (Part D).
It is illegal for anyone to sell you a Medigap policy if you have a Medicare Advantage Plan unless you're switching back to Original Medicare.