Medigap Explained: What Medicare Supplement Insurance Does
A general introduction to Medicare Supplement plans and how they fit alongside Original Medicare.
Original Medicare pays for many health services, but not all of the cost. Deductibles, coinsurance, and copayments can add up. Medicare Supplement Insurance, commonly called Medigap, is private insurance designed to help cover some of those gaps. This article explains the general idea. Plan rules differ by state and over time, so check with official sources or a licensed counselor.
What Medigap Is
Medigap policies are sold by private insurance companies and work alongside Original Medicare. When you receive care, Medicare pays its share first, and then your Medigap policy pays its share of the remaining costs, depending on the plan. You still pay a monthly premium for the Medigap policy in addition to your Part B premium.
Medigap generally works only with Original Medicare. It is not meant to be used together with a Medicare Advantage plan. If you choose Advantage, you typically do not need or use a Medigap policy.
How the Plans Are Organized
Standardized Medigap plans are labeled with letters. In most states, a plan with a given letter offers the same basic benefits no matter which company sells it. This helps with comparing, since the main difference between companies selling the same lettered plan is usually the price and customer service, not the coverage.
Different lettered plans cover different combinations of costs, such as hospital coinsurance, doctor coinsurance, deductibles, and foreign travel emergencies. Some states use different standardized structures, so ask your state's insurance department or counseling program how it works where you live.
Things to Know Before You Buy
- Timing matters. There is generally a special period after you first enroll in Part B when you have a guaranteed right to buy a policy, without being turned down or charged more for health conditions. Outside that window, an insurer may ask medical questions in many states.
- Medigap does not cover everything. It generally does not include prescription drug coverage, and it usually does not cover routine dental, vision, or hearing care. A separate Part D plan is typically needed for medicines.
- Each policy covers one person. Spouses need separate policies.
- Premiums can change. Companies price policies in different ways, and the cost can rise over time.
- Policies are generally renewable. As long as you pay the premium, the company usually cannot cancel it because of health changes.
How to Compare Policies
Start by deciding which kind of coverage you want. Then compare companies selling the same plan letter. Look at how they set prices, how they have raised them in the past, and how responsive they are to customers. Ask each company how its premium is determined and whether discounts exist.
Your state health insurance assistance program can provide unbiased help. Counselors do not sell insurance and can explain how the rules apply in your state. Be careful with phone calls, mailings, or visitors who press you to buy right away.
Keep your policy documents together with your other important papers, and review your coverage annually to make sure it still fits your needs.
Questions to Bring to a Counselor
Before you commit, write down what matters most. Ask which plan letters are available in your state, what your guaranteed-issue rights are, and how companies set their premiums. Ask whether you would be better served by a different kind of coverage entirely. Your counselor can also help you understand how a Medigap policy would work alongside your drug plan. Take notes, and do not sign anything until you feel you understand it.
The takeaway: Medigap helps with some of the costs Original Medicare leaves behind. Pay attention to enrollment timing, compare same-letter plans, and seek free guidance from official counseling services.