What is Medicare Supplement (Medigap) Insurance?

Medicare Supplement (Medigap) insurance, sold by private companies, can help pay some of the health care costs that Original Medicare (Medicare A and Medicare B) does not cover - like coinsurance and deductibles.

Some Medicare Supplement policies also offer coverage for services that Original Medicare does not cover, like medical care when you travel outside the United States. Medicare Advantage plans are an alternative way to get Medicare benefits, Medicare will pay its share of the Medicare-approved amount for covered health care costs. Then your Medicare Supplement policy pays its share.

A Medigap policy is different from a Medicare Advantage plan (Medicare Part C). Those plans are ways to get Medicare benefits, while a Medicare Supplement policy supplements your Original Medicare Part A and Part B benefits.

Nine Things to Know About Medicare Supplement Policies:

  • 1 You must have Medicare Part A and Medicare Part B.
  • 2 If you have a Medicare Advantage plan, you can apply for a Medicare Supplement policy, but make sure you can leave the Medicare Advantage plan before your Medigap policy begins.
  • 3 You pay the private insurance company a monthly premium for your Medicare Supplement policy in addition to the monthly Part B premium that you pay to Medicare.
  • 4 A Medicare Supplement policy only covers one person. If you and your spouse both want Medicare Supplement coverage, you will each have to buy separate policies.
  • 5 You can buy a Medicare Supplement policy from any insurance company that is licensed in your state of residence to sell one.
  • 6 Any standardized Medicare Supplement policy is guaranteed renewable even if you have health problems. This means the insurance company cannot cancel your Medicare Supplement policy as long as you pay the premium.
  • 7 Some Medicare Supplement policies sold in the past cover prescription drugs, but Medicare Supplement policies sold after January 1st, 2006 are not allowed to include prescription drug coverage. If you want prescription drug coverage, you can join a Medicare Prescription Drug Plan (Medicare Part D).
  • 8 It is illegal for anyone to sell you a Medicare Supplement policy if you have a Medicare Medical Savings Account (MSA) Plan.
  • 9 If you have a Medicare Advantage plan and want to move to a Medicare Supplement, you may have to complete a health questionnaire. Acceptance to the new Medicare Supplement plan is not always guaranteed. Pricing may also be determined by your health questionnaire.
Medicare Supplement Policies Do Not Cover Everything

Medicare Supplement policies generally do not cover long term care, vision or dental care, hearing aids, eyeglasses, or private-duty nursing.

Insurance Plans That are Not Medicare Supplements

Some types of insurance are not Medicare Supplement plans, which include:

  • Medicare Advantage plans (like an HMO, PPO, or Private Fee-for-Service Plan)
  • Medicare Prescription Drug Plans/ Medicare Part D
  • Medicaid
  • Employer or union plans, including the Federal Employees Health Benefits Program (FEHBP)
  • Tricare
  • Veterans benefits
  • Long-term care insurance policies
  • Indian Health Service, Tribal, and Urban Indian Health plans

Dropping Your Entire Medicare Policy (Not Just the Drug Coverage)

If you decide to drop your Medicare Supplement policy, you need to be careful about the timing. For example, you may want a completely different Medicare Supplement policy (not just your old Medicare supplement policy without the prescription drug coverage), or you might decide to switch to a Medicare Advantage Plan that offers prescription drug coverage.

If you drop your entire Medicare Supplement policy and the drug coverage was not creditable or you go more than 63 days before your new Medicare coverage begins, you may have to pay a late enrollment penalty for your Medicare Prescription Drug Plan, if you choose to join one.