A Medicare supplement plan—also known as Medigap insurance—is sold by a private insurance company, as opposed to being sold by the government as Original Medicare is.
Private insurers sell Medigap because Medicare doesn’t cover all of the medical expenses you could possibly need to maintain great health throughout retirement. These policies help pay some of the healthcare costs that Original Medicare doesn’t cover, such as copayments, deductibles, coinsurance and even medical care needed outside of the U.S.
However, any expenses or treatments that Medigap supplement insurance covers must be Medicare-approved.
A Medigap supplement plan differs from a Medicare Advantage plan in that it SUPPLEMENTS Original Medicare by providing additional benefits, as opposed to REPLACING Medicare with a private insurance company’s plan. Medicare Advantage plans have stop losses that Medicare does not as well.
With this in mind, here is a list of eight essential things you must know about Medigap insurance before you apply:
- Prior Enrollment – In order to purchase a Medigap supplement plan, you must already be enrolled in Medicare Part A and Part B.
- You Can’t Have Your Cake and Eat It Too – If you are already enrolled in a Medicare Advantage plan, you can still switch to a Medigap policy, but you must be sure you can leave the Advantage plan before your Medigap policy begins.
- No Freebies – In addition to the monthly premium you pay to Medicare for your Part B plan, you must also pay the private insurance company a monthly premium for your Medigap policy.
- No 2-for-1 Deals – If you and your spouse both want Medigap coverage, you will each have to buy separate policies, and therefore, pay separate monthly premiums.
- In-State – You must buy your Medigap policy from an in-state insurance company that is licensed to sell one (very important).
- You’re Never Too Sick for Medigap – Even if you have major health problems, your insurance company cannot cancel your Medigap policy as long as you pay your premiums.
- Drug-Free – As of January 1, 2006, Medigap policies are no longer allowed to cover prescription drugs. However, the Medicare Prescription Drug Plan (Part D) can.
Again, You Can’t Have Your Cake and Eat It Too… – It is illegal for an insurer to sell you a Medigap policy if you have a Medicare Medical Savings Account (MSA) plan.
Medigap policies are great for those moments when deductibles or copayments are high, or for when you decide to travel outside the country and end up needing medical care while you’re away. They are particularly important for when you have a large medical bill. With Original Medicare alone to work with, you could end up spending tens of thousands of dollars out of pocket if a major medical event were to occur.
These plans still don’t cover everything; some of the treatments Medigap policies don’t cover include long-term care, vision care, dental care, hearing aids, eyeglasses, and private-duty nursing. However, if you want these medical expenses to be covered there are plans available that do so. At MediGap Advisors, we help you find that plan or plans for you, namely the policies that cover all the medical expenses you foresee yourself needing in the future.
We keep you informed with the most up-to-date information about saving money on insurance and prescriptions, and we provide comprehensive reviews of what will work best for you and your loved ones. Best of all, we do it all for free. To see how we can help you find the Medigap coverage you need, check us out at our website.
Wiley Long is founder and president of Medigap Advisors, and is passionate about helping people navigate the confusing waters of Medicare. He is the author of The Medicare Playbook: Designing Your Successful Health Coverage Strategy, a clear and simple explanation so you can make the most of your Medicare coverage.