Guide to Medigap Plans

Medigap Plans are Supplemental Insurance Plans that are designed to fill in the coverage gaps that exist in Original Medicare. Original Medicare was never designed to cover 100% of a person's health care costs. All sections of Medicare include deductibles and co-insurance amounts (usually 20%) that the patient is responsible for paying. In some cases these patient costs will be covered by retiree health care benefits from a previous employer. However, today generous pensions plans are the exception rather than the rule. Many Medicare recipients find the remaining patient costs that exist with Original Medicare prohibitively expensive. Medigap Plans can help make up the difference.

Private insurance companies offer Medigap Plans. The general coverage guidelines are standardized into plans labeled A-N. All states, with the exception of Massachusetts, Minnesota and Wisconsin, have adopted this standardized list of Medigap Plans. All plans within these letters in other states must provide substantially the same coverage. Plans E, H, I, and J are no longer offered. If you have one of these discontinued plans you can continue to use it.

Auntie Lou says, "They did away with Plan E, H, I and J just to see if we could still recite our ABCs!"

Medigap Plans Vary, Choose Wisely

What these plans charge for premiums and how they are administered can vary widely plan to plan. When selecting a plan it is always best to compare plans of a similar letter against plans of the same letter rather than trying to compare plans across letters. For example, compare Medigap Plan A with other Medigap Plan A's to see how they differ in coverage details and costs.

Auntie Lou says, "Shop around and read ALL the small print when choosing a Medigap Plan."

Medigap coverage can be added at any time. However, guaranteed issue rights only exist during your Medigap Open Enrollment Period. This Open Enrollment Period starts when you are 65 years of age and enrolled in Original Medicare Part B. This is the best time to buy your Medigap policy because you will not need to submit to complex insurance underwriting and the Medigap Company cannot deny or delay coverage. After this initial 6-month period your guaranteed issue rights will disappear and the insurance company can do as it likes.

It is not possible to use a Medigap Policy with a Medicare Advantage Plan. You must choose either one or the other. In other words:

  • Original Medicare Part A, Part B with a Medigap policy (and maybe part D, Rx coverage).
  • Medicare Advantage Plan. Part D can be added if not included

It is also illegal for anyone to sell you a Medigap policy if you are enrolled in a Medicare Advantage Plan.

Medigap Plans Are Location Specific

Medigap Plans are location specific and vary state to state. These plans are standardized but every state has the right to add additional rules. Many states have chosen to relax Medigap rules further than the Federal Laws to ensure that their seniors can get a Medigap Plan if they need one. Because Medigap Plans are location specific they might not provide coverage outside of their locality. Urgent and emergency care is generally covered but everything else might not be if you need to see a doctor away from home.

In summary, Medigap Plans provide coverage that works in conjunction with Original Medicare. Your Open Enrollment Period for Medigap starts when you are 65 years old or older and enrolled in Plan B. Signing up during this period gives you guaranteed issue rights. This Open Enrollment Period occurs only once and it cannot be recovered or renewed.